The IKEA Foundation and Rockefeller Foundation will set up a $1 billion global platform in 2021 to fight climate change and energy poverty. The platform aims to reduce 1 billion tons of greenhouse gas emissions and empower 1 billion people with distributed renewable energy.
Renewable energy would be generated from mini-grid and off-grid solutions located near the point of use, rather than centralized sources like large-scale projects. The new global platform will oversee the organizations’ combined matching funds.
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. The platform would function as a public charity to manage a concerted effort to rapidly channel development funds to life-changing projects on the ground.
While funding for energy transition has increased globally, many organizations 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 achieve better renewable electrification and development targets.
The Rockefeller Foundation will incubate the platform in RF Catalytic Capital Inc. to facilitate the joint investment, 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.
Dr. Rajiv J. Shah, President of The Rockefeller Foundation, said, “Big, bold, and pioneering collaboration and investment is required not only for the short term but also the long term, to galvanize 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.”
Per Heggenes, CEO of IKEA Foundation, said, “Our collective ambition is to create a platform that supports renewable energy programs which can deliver greenhouse gas reductions fast and efficiently and accelerate the energy transition. We need to replace polluting energy sources 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.”
Netherlands-based Ingka Group announced its plans to invest €600 million (~$710 million) over the coming year to help IKEA, its subsidiary, keep its commitment to become climate positive by 2030.
In 2019, Tata Power and the Rockefeller Foundation had launched TP Renewable Microgrid Ltd., with plans to set up 10,000 microgrids in India by 2026.
Rahul is a staff reporter at Mercom India. Before entering the world of renewables, Rahul was head of the Gujarat bureau for The Quint. He has also worked for DNA Ahmedabad and Ahmedabad Mirror. Hailing from a banking and finance background, Rahul has also worked for JP Morgan Chase and State Bank of India. More articles from Rahul Nair.