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Financing the frontier of energy storage

Mafalda Duarte, CEO of Climate Investment Funds talks to Ashok Thakur, Chief Editor of ETN, about CIF's financial support programs for energy storage projects in developing countries, future investment plans, and commitment to a climate-smart future through storage technologies.
Mafalda Duarte

What is Climate Investment Funds?

At the height of the global financial crisis in 2008, global leaders established the $8 billion Climate Investment Funds (CIF) to provide scaled-up financing for the demonstration, deployment, and transfer of low-carbon and resilient climate solutions with a significant potential for long-term transformational change. Twelve years on, CIF is a pioneer in global climate finance; mobilizing partners, opening markets, and catalyzing transformational change in more than 70 developing countries.
We are proud to be the largest source of climate finance in developing countries.
Our business model works through six multilateral development banks (The World Bank, International Finance Corporation and four regional MDBs Multilateral Development Banks) in a programmatic way across more than 300 projects. CIF aims to test new business models, build track records in unproven markets, lay the foundation for evidence-based learning to enhance climate investments and boost investor confidence to unlock additional sources of finance. We have proven that these models work even in the most challenging economic environments, such as those found at CIF's inception and today, in the wake of the global COVID-19 pandemic.
CIF-backed investments are attracting $60 billion in expected co-financing and delivering impressive results on the ground. They are contributing to the generation of 25.3GW of new clean power capacity, improved energy access for 8.8 million people and over 300,000 businesses, greater climate resilience for 45.2 million people and the sustainable management of 30 million hectares of forests.

What are some of the major investments CIF has made previously?

The transformational power of CIF investments is our work with Concentrated Solar Power (CSP) in Morocco. Prior to 2010, Morocco had no significant investment in CSP, so CIF- in partnership with the World Bank, AfDB (African Development Bank) and others - invested around $500 million in the 500 MW Noor CSP complex. Our investment helped to reduce project costs by 25 percent in Phase 1 of the project compared to financing available from commercial banks, and by a further 10 percent in phases two and three.
But that was not all. Our commitment also enabled the Moroccan Government to bring a large number of investors on board, which helped to change perceptions of risk towards investing in the technology. Morocco is now a global leader in renewable energy development and is successfully attracting foreign investment in the sector, while the CIF has supported 15 percent of current global CSP installed capacity. In addition, recent CIF investments in Noor Phase 3 included molten salt storage components, which have exceeded expectations and shown that combined CSP-thermal storage can provide all-day energy with seven hours of stored electricity.

What are your plans for future investments in energy storage?

CIF's recently approved Global Energy Storage Program (GESP) will build on our track record in energy storage and push for more innovation. The Program will utilize CIF's unique MDB-driven business model to generate more investment into energy storage technologies like batteries, but also pumped hydro and green hydrogen. It will also stimulate investment in policy interventions, technical assistance and knowledge coordination. The Program already has $250 million in resources and we are hopeful that there is more to come. Demand for this Program is high, as we have a pipeline of over $800 million in potential investments in more
than 30 countries, focusing on battery, pumped hydro and green hydrogen technologies. We expect to begin approving investments in the coming months.

Author : Ashok Thakur
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