From 1991 until the middle of last year, the renewable energy portion of the GEF’s climate change portfolio amounted to US$1.14bn, with an average of US$5.5m per project, according to ‘Investing in Renewable Energy: The GEF Experience.’ The 36-page report was released by the agency late last year.

Funding for renewable energy increased until 2006, but the share of renewable energy in the portfolio has decreased in the current GEF-4 due to “the expansion of the energy efficiency and other portfolios; the high amount of funding directed to renewable energy projects (such as concentrated solar power projects) approved under GEF-3, which are still under implementation; and the decision not to pursue the strategic objective for the promotion of off-grid renewable energy technologies in GEF-4,” it explains.

Funding for renewable energy in GEF-3 (2002-06) was 60% of the total investment portfolio, but has dropped to less than 20% under GEF-4 (which runs until 2010).

Since its inception, the GEF has supported 208 renewable energy projects, most in Asia, Africa, and Latin America and the Caribbean. The majority of GEF funding is directed to projects that promote a range of technologies because its role is to catalyse and transform energy markets generally, not to pick single technologies within the market, the report explains.

Of US$1.14bn in funding, 32% has gone to Asia, 28% to Africa, 21% to Latin America & the Caribbean, 10% to Eastern Europe & Central Asia, 8% to global projects and 1% for regional facilities. While geothermal received almost 30% of total investment in the pilot phase (1991-94), it receives almost nothing in GEF-4 while 70% goes to combined technologies.

Other technologies that have been supported include solar thermal heating, solar thermal power, solar photovoltaic (PV), wind power, small hydropower and biomass.

The average cost-effectiveness of GEF funding for renewable energy projects is estimated at US$3.97 per tonne of CO₂ directly avoided and, over their lifetime, renewable energy projects approved by the GEF (to June 2009) are estimated to avoid (directly and indirectly) 290 Mt and 1200 Mt of CO₂ respectively, the report estimates.

In future, the GEF support to renewable energy will focus on:

• Creating conducive markets to renewable energy through a combination of technical assistance for policy and regulatory support, building the technical and institutional capacity, and establishing financing mechanisms for investment in the deployment and diffusion of renewable energy technologies;
• Investing in the transfer of renewable energy technologies by expanding its investments in the transfer of commercially proven RETs and emphasising market demonstration and commercialisation of new technologies;
• Promoting access to modern energy services (particularly in sub-Saharan Africa, South Asia and Small Island Developing States) where most people in rural areas have no access to electricity and rely on traditional biomass and imported fossil fuels to meet their basic energy needs.

“The world is at critical crossroads for the future of energy,” explains GEF chair Monique Barbut in the report’s forward. “The renewable energy sector is the one energy sector that stands out for its ability to reduce GHG emissions and pollution and to exploit local and decentralised energy sources.”

“These renewable sources are immune to the volatility of the fossil fuel markets and bring the added benefits of stimulating employment, technological development, and economic growth,” she adds. “There is no doubt that renewable energies constitute a key element of a sustainable future.”

The Global Environment Facility unites 179 governments in partnership with international institutions, non-governmental organisations and the private sector. It is an independent financial organisation which provides grants to developing countries and countries with economies in transition, for projects which benefit the environment.

Established in 1991, the GEF has allocated US$8.6bn, supplemented by US$36bn in cofinancing, for 2400 projects in 165 developing nations. Its partnership includes the UN Development Programme, UN Environment Programme, World Bank, UN Food & Agriculture Organization, UN Industrial Development Organization, African Development Bank, Asian Development Bank, European Bank for Reconstruction &  Development, Inter-American Development Bank, and International Fund for Agricultural Development.