chapter  6
20 Pages

De-risking low carbon investments in the GCC

WithStephen Gitonga, Walid Ali

Setting the world on a truly climate friendly and sustainable development path will require huge investments in low carbon technologies, including in renewable energy. Approximately $13.5 trillion will be needed by 2030 to fully implement the Nationally Determined Contributions (NDCs), the main vehicle countries will use to collectively achieve the goals of the COP21 Paris Agreement.

Private and institutional investors control nearly $100 trillion of assets globally, but less than 1 per cent of this is currently invested directly in sustainable energy. As energy technologies and markets are evolving rapidly, investors are wary of risk and uncertainty. To mobilize capital toward the scaling up of low carbon solutions, governments will need to implement new and innovative policies that lower the perceived risks.

This chapter assesses the potential to apply the 101De-risking Renewable Energy Investment (DREI) methodology, pioneered by the United Nations Development Programme (UNDP), 1 to countries belonging to the Gulf Cooperation Council (GCC). Initially created for use in developing countries to identify and address barriers to investment through effective policy packages, the DREI methodology could help GCC countries more quickly mobilize available private sector investment for a low carbon pathway that includes action to expand renewable energy, improve energy efficiency and curb energy demand growth.