Political will is central for countries who want to grow their share of renewable energy in the energy mix, according to the European Bank for Reconstruction and Development (EBRD). At an event in Istanbul this week bringing together policymakers from EBRD investment locations including Albania, Azerbaijan, Georgia, Kazakhstan, North Macedonia, Serbia, Turkey and Uzbekistan, as well as global and regional developers of renewable energy projects, manufacturers and financiers, the bank forcefully called for more effective policymaking to ramp up investment in renewable projects.
“We can no longer think of megawatts but gigawatts – both in our ambition and delivery of renewable energy generation,” said Nandita Parshad, EBRD Managing Director for Sustainable Infrastructure. “Record low prices, especially for solar and wind, show how the economics of clean energy are aligning with the physics of climate change.”
Fred Kempe, President and CEO of the Atlantic Council, reminded conference participants of the risks climate change poses to “the very prosperity and security that has underwritten the post-Cold War global order”.
He continued: “Climate-fuelled natural disasters have cost the economy almost US$ 1 trillion over the last five years. The energy transition is driven in part by the quest to avoid these costs and will require massive investment. However, if implemented correctly, it will bring about countless benefits and become a driver of economic growth, innovation and energy security for all.”
Defne Arslan, Director of the Atlantic Council in Turkey, added: “From the massive scale-up in wind and solar in Turkey and the region, to the construction of new transmission infrastructure that will better integrate neighbors and will help to unlock the region’s renewable potential, there is indeed an exciting path ahead of us to take.”
Last year alone, the EBRD financed almost 2.25 GW of new renewables across its region. The bank is currently working with 14 governments to start or launch renewable energy auctions, and has reaffirmed its readiness to support governments and businesses in creating adequate policy frameworks and arranging procurement processes, as well as providing finance and advice. Overall in 2019, EBRD green economy financing hit a record €4.6 billion (US$4.9 billion) – or 46% of total business volume. At the time of the 2015 Paris climate accord, the EBRD had set itself a target of dedicating 40% of annual investment to the green economy by 2020.
Earlier this month, the bank priced its largest ever green bond at launch, a US$925 million five-year global (SEC Exempt) Environmental Sustainability Bond, its first benchmark for 2020. Due on 13th February 2025, the paper pays a semi-annual coupon of 1.5% and priced with a spread of 7bps above mid-swaps, equivalent to CT5+7.65bps – the tightest spread to US Treasuries for EBRD in recent history and amongst the tightest prints in the SSA peer group. The final book saw 56 individual investors of which 17 were new to EBRD, and orders in excess of US$1.3 billion.