Understanding Climate Finance
Olivier Mussat, Chief Investment Officer for IFC’s Global Energy Group, shares IFC investment priorities
May 6, 2021
Olivier Mussat, Chief Investment Officer at the International Finance Corporation, oversees a $11bn portfolio of energy assets. He discusses the IFC’s strategic shift towards renewable energy investments fueled by technological advances and climate urgency. Mussat highlights the evolving strategies for hydrocarbons in developing nations, emphasizing sustainability and local community benefits. He also explores the importance of early engagement with project developers and the challenges of balancing climate goals with developmental needs, particularly in Africa.
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Quick takeaways
- The substantial shift in energy investment priorities towards renewable sources, particularly solar power, reflects advancements in technology and climate change concerns.
- IFC focuses on strategic investments in emerging markets, addressing regional needs and infrastructure while prioritizing sustainable energy solutions like solar and green hydrogen.
Deep dives
Shift in Energy Investment Focus
The shift in energy investment priorities over the last decade has seen a substantial increase in funding for renewable energy sources, particularly solar power. Previously, much investment was directed towards oil and gas, with around $2 billion a year allocated to these sectors; however, this has drastically changed, with investments in solar surpassing $2 billion. The transition is attributed to advancements in technology that have made solar and wind power more competitive compared to traditional hydrocarbon fuels. Moreover, the growing recognition of climate change concerns has influenced this shift, leading to an emphasis on sustainable energy solutions.
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