With $70 million in concessional funding approved by the Climate Investment Funds (CIF) today, Brazil is set to embark in a $9.1 billion renewable energy revolution. We talked to Jimmy Pannett, Renewable Energy Integration (REI) Lead about the significance of the CIF investment.
What are Brazil’s plans as part of the Renewable Energy Integration investment program?
The Brazil investment plan will support the country in modernizing the electricity grid and this will have major development and social inclusion impacts, with improved access to clean energy for 3.1 million people, notably Indigenous peoples and local communities in remote areas of the country. With an upgraded grid, all Brazilians will be empowered to take a more active role in electricity production, with the opportunity to become “prosumers” - producers and consumers of energy.
The investment plan also features a groundbreaking investment in hydrogen production in the Pecém hub, near Fortaleza, with a projected installed capacity of 6 GW by 2034. Hydrogen production is set to boost green economic and industrial development, for example in green steel.
The investment will be channeled through the Inter- American Development Bank and the World Bank and is expected to mobilize $9.1 billion, featuring an exceptional leverage ratio of 1:130. And a reduction of emissions by at least 57 million tons of CO2 equivalent. On implementation it is set to more than double non-conventional renewable energy installed capacity by 2030.
Brazil is the second country to have an investment plan approved by CIF governance, following Colombia earlier this year. Can you talk about the REI program and what it aims to achieve?
REI exists to help low- and middle-income countries develop more flexible and resilient energy systems, so they can handle a larger share of intermittent renewable energy.
To achieve our global climate goals, the energy sector needs to start shifting from being fossil-based to zero-carbon by 2030 at the latest. Accelerating this transition means that countries need to enhance the flexibility of their energy systems to facilitate the penetration of renewables. Countries in the developing world often lack the capacity for such flexibility.
REI aims to help address system-wide barriers to the integration of higher shares of intermittent renewable energy generation into the grid and take advantage of the emerging opportunities, as part of the clean energy transition.
What are next steps for the REI program?
Demand for renewable energy integration support is huge. Sixty developing countries - one-third of the world’s nations - applied for CIF REI funding.
Beyond Brazil and Colombia, shortlisted countries that might have their investment plans approved before the end of 2023 include Fiji, Kenya, Mali, Ukraine, Costa Rica, India, Indonesia, and Türkiye. We are also exploring ways to support countries that were not invited to develop an investment plan. For the countries that were not selected, we have launched the REI Learning Platform, which aims to provide knowledge sharing opportunities along with targeted technical assistance for those that are still learning what RE integration means for them.