A recently released report, indicates that BRICS member states – Brazil, Russia, India, China and South Africa – are $51 billion short of achieving their annual investment to deliver clean power projects.
According to the report titled, The New Development Bank: Its role in achieving BRICS Renewable Energy Targets, the four countries have announced goals that will require an annual investment over the next few years of $177 billion.
BRICS development goals require stronger financial backing
The paper was issued last week by the Institute for Energy Economics and Financial Analysis (IEEFA).
“We see important stakes being taken by development banks that include the New Development Bank (NDB), which really is new. It is a jointly owned and operated bank funded by the five BRICS nations, and this year made its first loans,” Jai Sharda, IEEFA energy-markets consultant explained.
Sharda noted in a statement that these efforts need the backing of something stronger such as private-public partnerships, or ‘blended finance’.
“Under the ‘blended finance; model, public capital can catalyse much larger private investment in renewables.
“By our lights, every $1 set up through such models to fund infrastructure projects in developing countries and promote sustainable development will draw $4 in private investment,” Sharda added.
The consultant continued: “The caveat is that publicly financed banks like NDB invest appropriately, putting dollars into energy projects that are truly sustainable and that do not rely on outdated fossil-fuel development.”
The report summary noted: “After being founded in 2013, NDB has made the first round of loan advances – one loan each to its member states. The loan book size has grown to $911 million.
“Going ahead, NDB plans to expand its loan book by an estimated $1.2 billion annually over the next three years.
“The objectives of the NDB include promotion of infrastructure development in developing countries and bringing about sustainable development.”