Financial Mechanisms to Drive Sustainable EnergyLatin America and the Caribbean is in renewable and nonrenewable energy resources, however, a high percentage of population in the region still lack access to modern electricity services, coverage and quality of services still does not meet all needs in an equitable manner. Read More
Progress must be made towards improving energy efficiency (EE), harnessing renewable sources, and diversifying the energy matrix is key to a sustainable use of the abundant resources available.
SCOPE OF ACTIVITIES OF ESI
Latin America and the Caribbean is a world leader in the utilization of renewable energy sources such as hydropower and efficient biofuels. However, the region has only developed about 30 percent of its hydropower capacity, and the potential of new but rapidly developing sources -- such as wind, solar, and geothermal energy -- has barely begun to be tapped relative to the existing resource endowment.
Energy Efficiency - ESI
The use of more efficient technologies and equipment retrofit strategies play a key role in reducing the energy intensity of economic activities and avoiding additional energy demand. The introduction and adaptation of innovative technologies can improve business productivity, reduce greenhouse gas (GHG) emissions to advance climate change mitigation in a cost-effective manner. Among the financial mechanisms for the implementation of EE projects that, the Bank has already implemented Energy Saving Insurance Program (ESI). Insurance that covers projected energy savings for EE measures in small and medium enterprises (SMEs). Those measures, specifically defined and fully verifiable, are agreed in a standard contract between the companies and the technology service providers. Its risk-sharing mechanisms compensate companies if the projected financial flows associated with EE savings are not materialized.
The transport sector in Latin America and the Caribbean contributes to approximately 34% of energy-related greenhouse gas emissions. The Bank seeks to promote investments in lower emission vehicles such as hybrid and/or electric public and private transport fleets. Electric mobility represents a great opportunity for the countries of LAC, since reduces GHG emissions to the extent that the electricity grids in the region have relatively low emission factors, lower than in some developed countries. Electrical mobility also helps to reduce emissions of air and noise pollutants, improve local air quality and reduce the impact on health, particularly for inhabitants in urban areas. Interventions from the financial side are aimed at removing barriers to investment through risk mitigation mechanisms for investors and financial institutions and the development of innovative solutions driven by concessional climate funds. Some of the issues addressed are the analysis of concession contract models, technical and financial evaluation of specific projects, definition of investment models and support to financial institutions in building sustainable transport capacity.
Is a critical tool for the expansion of renewable energy, enabling the electrification of transport and energy consumption in urban areas, in particular with grid-connected storage systems. There is a relatively wide range of technologies that can be exploited and their use will need to be extended as storage costs decrease, which is already happening progressively. It focuses on the development of schemes to facilitate investment in battery electric energy storage, in recognition of the multiple services that batteries can provide in the supply, demand and transmission of energy. Initially the Bank has focused on promoting the implementation and scaling up of hybrid solar/wind systems - small and large scale energy storage and the analysis of regulatory issues.
WHY SUSTAINABLE ENERGYEnergy efficiency and sustainable energy reduce energy demand, promote lower carbon energy supply, reduce net emissions and also enhance carbon sinks.
In this way, progress is being made in expanding -in a diversified and secure manner- the access of Latin American and Caribbean countries to efficient, sustainable, reliable and affordable energy, while helping to reduce poverty, promote a better quality of life, foster competitiveness and boost sustainable development, while facilitating economic growth.
Sustainable energy and barriers to investment:
PARTNERS ON THE GROUNDWho is supporting Sustainable Energy
The Inter-American Development Bank has partnered with major "green" players to catalyze investments in the U.S. in the Latin American and Caribbean region.
The IDB is promoting and expanding sustainable energy with support from the Government of Denmark through the Danish Energy Agency.
- Mantente informado sobre el financiamiento verde
IDB Invest supports social and priority housing through the first social bond issued by a private entity in ColombiaIDB Invest, a member of the IDB Group, has subscribed to a social bond issued by La Hipotecaria Compañía de Financiamiento S.A. (La Hipotecaria), for 52 […]