For the first time, clean energy financing from development banks breached the $100 billion mark in 2012. And for the second consecutive year, Kfw Entwicklungsbank, China Development Bank and the Brazilian Development Bank are the top three development bank funders in the sector.
This is according to the latest report from Bloomberg New Energy Finance, which examined clean energy transactions of 26 national and multilateral development banks from 2007 to 2012. Development banks’ clean energy investments — which covered subsectors such as renewable energy, energy efficiency, and transmission and distribution — surged threefold from $36.8 billion in 2007 to $108.9 billion in 2012.
KfW has been the top development bank donor for clean energy since 2007, spending more than $146 billion in six years. The German development bank’s clean energy assistance has steadily increased, but grew significantly in 2012, when it jumped 48 percent from $23.2 billion in 2011 to $34.4 billion.
China Development Bank provided the second-highest funding to clean energy in 2012, which amounted to $26 billion that year, up 37 percent from $18.9 billion in 2011. The Chinese financial institution — which, together with the China Export-Import Bank, loaned more development dollars than the World Bank at one point — invested $77 billion in clean energy from 2007 to 2012.
The Brazilian Development Bank took the third spot from the European Investment Bank in 2011, when it significantly increased clean energy spending from $3.9 billion in 2010 to $12.4 billion that year. But while it remains the third-highest development bank donor to the sector, its spending dipped 5.6 percent to $11.7 billion in 2012.
The Inter-American Development Bank and Nordic Investment Bank, which reduced clean energy spending in 2012, are no longer in the top 10. From $1.9 billion in 2011, IDB’s investment dropped to $1.2 billion in 2012. NIB’s spending, meanwhile, decreased from $1.7 billion in 2011 to $1.2 billion in 2012.
Entering the top 10 for the first time, the African Development Bank massively increased its clean energy assistance by 92 percent to reach $1.5 billion in 2012. Before then, AfDB’s highest spending on clean energy amounted to only $769 million.
The surge in development bank funding for clean energy was well-timed. The World Meteorological Organization reported a 30 percent increase in global warming as a result of greenhouse gas emissions in 2011. In addition, recognizing that access to affordable clean energy services is critical to sustainable development, the U.N. General Assembly declared 2014-2024 as the “Decade of Sustainable Energy for All.”
Juan Carlos is an analyst at the Devex Manila Office where he provides business information by producing early intelligence, donor funding strategy, and project reports. A strong advocate of civic education, he also teaches undergraduate courses on Philippine politics and governance.
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