Fostering Public-Private partnerships

 

The Clean energy access mechanism

 

Access to electrification based on renewable energy sources is at the crossroads of both major objectives, which have mobilized the United Nations for two decades – the Millennium Development Goals (for the eradication of extreme poverty); climate change mitigation (through the development of new renewable energies).

 

The Copenhagen Climate Change conference and the proposed Green Climate Fund did open the path, that Cancun and Durban conferences have confirmed. Today, universal access to modern and sustainable energy is fully identified as the major condition for human, social and economic development of the poorest regions of vulnerable countries.

 

UN Secretary General has declared 2012 to be the Year of Sustainable Energy for All. However, investment is lagging behind the level needed to ensure fulfilment of universal access. Bridging the financial and entrepreneurial gaps needs additional and innovative resources and the mobilization of national and international investors. Besides, the Clean Development Mechanism, one of the Kyoto mechanisms has demonstrated

its limits to respond to the needs of the less advanced countries.

 

The Clean energy access mechanism aims to develop international public-private partnerships to spark socially responsible investments for vulnerable countries’ access to electrification, focusing on rural, isolated regions. The projected mechanism proposes mobilizing “new and additional” funding to fulfill the objective of universal access to electricity, complementary to traditional financing mechanisms such as development aid, international finance institutions and carbon finance.

 

The goal is to foster the creation of not-for-profit foundations, affiliated to regulated electric utilities from the industrialized countries, in order to finance electrification investments relying on renewable technologies. The so called Foundations for Clean Electrificationwill be financed by a universal contribution levied on regulated tariffs, financed by consumers. The scheme is similar to existing contributions, already familiar to electric utilities for rural/urban tariff perequation; subsidization of renewable energies (e.g. feed-in tariffs). Also, the utilities, through their affiliate foundations, will have the opportunity to send technical teams on temporary assignments in developing countries for an efficient transfer of technology and electrification methodology.

 

The CDM PLUS also offers a scheme for boosting the existing CDM mechanism of the Kyoto Protocol by addressing its major flaws: few projects benefit to the vulnerable countries and even fewer to the poorest regions of these countries: on a total of 3,952 project registered at the CDM Board today, only 85 are located in Africa, only a few of them devoted to energy. Most of the projects dedicated to rural electrification do not pass through the commercial profitability threshold of private companies and financial markets. Small-scale projects need fast-track, accelerated, simplified procedures and also a much larger incentives than those generated by the CERs carbon credits generated.

 

The CDM PLUS mechanism would be enacted into an international convention signed under the UNFCCC:

 

“The signatory parties of the Clean Energy Access Convention (countries members of Annex B of the UNFCCC) will institute in their national legislation a provision authorizing public utilities, on a voluntary basis, to allocate a fraction of the regulated tariff to subsidizing affiliate foundations dedicated to investment in rural electrification using renewable resources”.

 

To monitor the Mechanism, and to measure progress, an international agency, devoted to the promotion of universal energy access, should be instituted with the following tasks: establishing a systematic review of progress, targets, milestones, deadlines; arbitration of potential conflicts between international investors and concessional authorities; accounting of financial North-South transfers parallel to the Green Climate Fund. The new institution could take place within existing UN agencies or the proposed World Environmental Organization.

 

Twenty years after the Earth Summit in Rio where the UNFCCC was enacted, the CDM PLUS project would transform the international solidarity objectives into concrete realizations, bringing clean kilowatt hours to poor populations presently deprived of access.

 

 

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