The IKEA Foundation and The Rockefeller Foundation have announced a $1 billion joint venture that aims to reduce 1 billion tons of greenhouse gas emissions and improve 1 billion lives with distributed renewable energy (DRE). The initiative will be operated through a new global platform, launching in 2021
The $1 billion global platform to fight climate change and energy poverty will be the single largest distributed renewable energy initiative. Distributed renewable energy is renewable energy generated from sources such as minigrid and off-grid solutions, located near the point of use, rather than centralised sources like power plants.
The platform aims to deliver clean and reliable power to the 800 million people worldwide who lack electricity, and a further 2.8 billion who have unreliable access. It will be run as a public charity to manage a concerted effort to rapidly channel development funds to life-changing projects on the ground.
To facilitate the joint investment, The Rockefeller Foundation will incubate the platform in RF Catalytic Capital Inc., which the foundation launched in 2020. This offers an innovative way for impact investors, and governments to combine their resources and expand their global philanthropic reach.
While funding to support the energy transition has increased at a global level, many organisations struggle to identify viable, investment-ready projects. As a result, many emerging economies still depend on unreliable and polluting energy sources. By creating a platform to deploy catalytic capital more efficiently, and at a scale that supports the expansion of local renewable energy projects, governments will be better able to achieve renewable electrification and development targets.
Per Heggenes, CEO of the IKEA Foundation, said: “If global energy consumption doesn’t change from fossil fuels to renewable energy, we will not meet the Paris Agreement ambitions and millions of families will be left behind in poverty. We need to be honest and recognise that the current approach is not delivering the impact the world needs in the time that we have.”
He added: “Our collective ambition is to create a platform that supports renewable energy programmes which can deliver greenhouse gas reductions fast and efficiently and accelerate the energy transition. We need to replace polluting sources of energy with renewable ones, provide access to energy to communities and unlock further funding for sustainable models.
“Ultimately, we aim to unite countries and communities in urgent action to tackle the climate crisis, reduce 1 billion tons of greenhouse gas emissions and, by doing so, we hope to positively impact the lives of 1 billion people.”
Dr Rajiv J. Shah, President of The Rockefeller Foundation, said: “Millions of lives and trillions of dollars have been lost to COVID-19, forcing people back into poverty after decades of progress. The effects of the climate crisis will make this even worse, which is why we must invest now to reverse this downward spiral.”
He added: “Big, bold and pioneering collaboration and investment is required not only for the short term, but also the long term, to galvanise a better future. That is why we are announcing our largest commitment to date and joining forces with IKEA Foundation to double that investment. Our partnership will unlock the financing and resources that are essential to provide clean, reliable electricity that improves the lives and livelihoods of people everywhere.”
The Rockefeller Foundation and the IKEA Foundation have a shared mission, backed by expertise and funds to achieve large scale greenhouse gas emission reductions and look forward to partnering together to improve lives and livelihoods around the world.