The Global Energy Alliance for People and Planet (GEAPP) was launched on November 2, 2021 at the COP26 with $10 billion of committed capital to accelerate investment in green energy transitions and renewable energy solutions in developing and emerging economies. This partnership leverages catalytic philanthropic funding to unlock investment capital with the aim of mobilizing $100 billion in public and private capital in order to reach one billion people with reliable, renewable power, avoid and avert four billion tons of carbon emissions, and create, enable, or support more than 150 million jobs and drive economic growth over the next decade. On February 28, GEAPP announced that UNICEF’s Ravi Venkatesan will serve as the Board Chair.
In a recent interaction with BW Businessworld, Venkatesan shares his insights on the alliance’s planned initiatives, future trends in climate financing and India’s energy transition drive.
Excerpts of a conversation with Arjun Yadav
You have had an illustrious career with varying leadership roles from Microsoft, Infosys, Bank of Baroda to UNICEF. What is the one important learning over the years being at these different leadership roles that you would seek to apply in this new role given how climate change has become an integral part of policy framework for countries around the world? How do you look forward to this new responsibility?
I’ve come to appreciate that solving “wicked” or complex problems requires many stakeholders from the private sector, public sector, civil society, academia to come together in a mission mode. The energy transition that we need to accomplish with urgency is a classic wicked problem with many interdependent factors and stakeholders, which is why alliances like GEAPP are critical. Over the past few years, I’ve had the chance to help build two alliances. One is called the Global Alliance for Mass Entrepreneurship (GAME). It seeks to create an entrepreneurial movement in India that results in 50 million new jobs over this decade and inspires similar movements in other regions. The second alliance is called “Generation Unlimited”; incubated at UNICEF; this aims to engage 1.8 billion young people globally and help them develop the mindsets and skills needed to succeed in the 21st Century.
Through these, we’ve learned a lot about how to build and govern such alliances. How you bring the private sector in is quite critical to solving this problem. So, I think this experience is probably what will be most valuable. And, of course, it is incredibly exciting to have the opportunity to play a small role in ameliorating the biggest challenge of our times.
The latest IPCC report has been released and it shows that things are getting worse on the climate front. After the COP26 summit last year, there has been a lot of renewed momentum towards fighting climate emergency. However, in the past we have seen this momentum fading away some months after the summit. After COP26 do you see the momentum sustaining?
The IPCC’s report is the latest shot across the bows for humanity, yet another urgent wake-up call that nobody should miss. It is true that in some areas, we have seen energy and attention dissipating once the intensity around the Summit subsided, but it is reassuring to see some very positive models emerging in certain areas that could be built upon. For example, look at the $8.5 billion “Just Energy Transition Transaction” among the UK, US, France, Germany, the EU and the South African government. The money will be directed towards retiring coal plants, giving way to cheaper and cleaner replacement power with renewables while ensuring that the affected workers are cared for. GEAPP is supporting these developments with strategic investments.
These are models that could be replicated in India, which has a vast dependency on fossil fuels, as well as similar economies elsewhere in the world. These types of partnerships have great potential to break the impasse we see between developing and emerging economies at climate negotiations. We are encouraged to see that the government of Indonesia is exploring how it could retire some of its coal assets early and replace them with clean power, ensuring a just transition and good, clean energy jobs for impacted communities. So rather than being discouraged by a few commitments that did not yield full results, we need to stay optimistic and try to accelerate actors, partnerships and models that are making an impact.
On the last day of the summit, India found itself in the middle of a debate when we changed a crucial clause with regard to phasing out coal to phasing down coal. We cited the failed commitments of the Western world on climate financing to justify this change and to a great extent it is true. How do you see the economics of climate financing unfolding in coming years now? Also, if you could elaborate more on leveraging catalytic philanthropic funding to unlock investment capital?
We agree that the OECD countries have not done enough to reduce their own emissions or support the energy transition in the emerging world in terms of concessional finance, technology transfer, and capacity building. We are aware that the 81 countries we describe as “energy-poor”, which includes India as well, have collectively contributed only 8 per cent of the emissions that are driving warming today, compared to 60 per cent for OECD countries. Though the $100 billion climate finance commitment made by OECD countries did not fructify, it is only a tiny fraction of the trillions required for clean investment in the emerging world every year. This is one of the reasons we established the GEAPP.
A key trend to watch for in climate finance is the growing pressure on public and private investors to step back from coal. The flow of capital to finance coal plants in Asia (mainly Japan, Korea and China) is drying up due to international pressure on these financiers. On the other side, the economics of renewables is going from strength to strength, and private financiers are looking to emerging markets for new projects with increasing interest. Still, among many financiers, the concern I hear regarding emerging markets is “not enough quality projects”. There is an appetite for capital investment, but there aren’t enough projects to deploy it faster.
There are two ways that GEAPP wants to get at this problem:
- Work in developing nations to create more clean energy projects acceptable to current investors by improving local enabling frameworks.
- Change the investment criteria of investors themselves: GEAPP can also play a role here by engaging with private investors more proactively and by using philanthropic capital to de-risk projects using blended finance structures.
That way, we could address the problem from both ends.
How do you see the future of green energy transition, especially India’s transition drive? We are having this conversation after the budget which identified climate action as an important goal of India’s lead up to the year 2047 and laid out provisions which would give the renewable sector a tremendous boost. We also had the announcement of the National Hydrogen Policy two weeks back. So how much are we on track, what more can be done?
At GEAPP, we are encouraged by the recent developments in India, especially the mainstreaming of climate considerations into energy and power system planning and efforts to boost the renewables sector. It’s indeed promising to see the focus on green hydrogen and green ammonia in India because these are undoubtedly technologies of the future that feed off abundant and cheap solar power. I believe India can gain a competitive advantage in these areas by moving fast due to its top-quality solar resource.
At the same time, let’s be conscious that, in the near term, there is a lot of work to be done because India may likely miss its 175GW target for the end of this year (now at 100GW). State Governments have a shared responsibility to deliver this target. GEAPP is actively looking for ways to support national and state policymakers to help India achieve its ambitious objectives.