Rio+20, the UN Conference on Sustainable Development, opened today amid much fanfare and the pessimistic outlook that agreement on key issues — financial commitments prominent among them — will be elusive. While national delegations pledged to commit capital to the Global Environment Facility (GEF) fund managed by the World Bank Group at the UN Framework Convention on Climate Change’s (UNFCCC) 17th Conference of Parties (COP-17) in Durban last year, the actual amounts committed to date falls far short of what’s been pledged.
The US delegation is expected to play an important role at Rio+20. While the going’s going to be rough in Rio, the US government, as well as those of other nations, continue to make substantial overseas investments to foster and promote sustainable development in smaller and less-developed countries.
In recent days, the US Overseas Private investment Corp. has announced it is investing some $360 million of capital to develop renewable energy resources and technology in Latin America, Southeast Asia, and Sub-Saharan Africa.
OPIC’s Board of Directors on June 19 approved $175 million to finance two new investment funds:
- $125 million for TPG Alternative & Renewable Technologies Partners (TPG ART) that aims to match and connect renewable energy technologies from US and European companies with markets in Latin America and Southeast Asia
“Taking the latest renewable energy technologies and applying them to emerging markets is one of the great development challenges of the coming years. Be it converting local biomass to high-value products, improving energy storage, or making use of state-of-the-art building materials, the technologies invested in by this fund will represent an important step toward meeting that challenge,” OPIC president and CEO Elizabeth Littlefield stated.
- $50 million for the GEF Africa Growth Fund, which aims to improve energy efficiency and agribusiness production in Sub-Saharan Africa by investing in environmentally-friendly energy infrastructure
“Rising energy demand and food consumption in Sub-Saharan Africa makes the connection between renewable energy and agribusiness critical to the subcontinent’s future,” Ms. Littlefield said. “The GEF Africa Growth Fund will make investments that accelerate the development of Africa’s energy infrastructure, particularly in industries that can raise agribusiness output to meet consumption needs.”
In addition, OPIC’s Board of Directors on June 18 approved $185 million to finance the construction of two 20-MW solar power plants in Peru. OPIC’s second major solar power project investment in the Andean nation, the two solar power plants are to have rated capacities of 20 MW each that will generate nearly 100 million kWh of clean, renewable electricity per year.
To be built in southern Peru, private equity firm Conduit Capital Partners will manage OPIC’s investment funds. The plants’ power output will be sold to Peru’s national grid operator.
Solar energy has great economic development, as well as clean energy, potential in Peru, a nation with one of the lowest electrification rates on the South American continent. Solar energy levels in Peru’s southern mountains exceed 6-kWh/sq. meter/day, among the highest in the world, OPIC notes.
“This project will enable Peru to take advantage of its great solar potential in order to increase energy access in rural, poorer areas where the need is greatest,” commented OPIC president and CEO Elizabeth Littlefield.
Peru’s government has made great strides in expanding access to electricity in recent years, but progress in its southern region have lagged. Access to electricity in Peru increased from 45% of the population in 1990 to 89% in 2011. Access in poorer rural areas is about 30%, however, according to OPIC, with more than 6 million Peruvians lacking access to electricity.
I've been reporting and writing on a wide range of topics at the nexus of economics, technology, ecology/environment and society for some five years now. Whether in Asia-Pacific, Europe, the Americas, Africa or the Middle East, issues related to these broad topical areas pose tremendous opportunities, as well as challenges, and define the quality of our lives, as well as our relationship to the natural environment.