On Monday, the IKEA Foundation, the independent philanthropy funded by Swedish modular furniture giant IKEA’s parent company Ingka Group, announced that it is partnering with the American Rockefeller Foundation to launch a $1 billion global platform to invest in renewable energy projects.
The investment platform, expected to launch later this year, will aim to reduce 1 billion tons of greenhouse gas emissions and to provide 1 billion people with distributed renewable energy (DRE), or energy generated from sources such as mini-grid and off-grid solutions, near the point of use, rather than from centralized sources like power plants. The platform will be incubated out of the Rockefeller Foundation’s public-private impact fund, RF Catalytic Capital, and then run as a public charity to rapidly channel development funds–i.e., “catalytic capital”–to projects on the ground directed at the 800 million people worldwide who lack electricity.
“If global energy consumption doesn’t change from fossil fuels to renewable energy, we will not meet the Paris Agreement ambitions and millions of families will be left behind in poverty. We need to be honest and recognize that the current approach is not delivering the impact the world needs in the time that we have,” IKEA Foundation CEO Per Heggenes said upon announcing the partnership.
“Our collective ambition is to create a platform that supports renewable energy programmes which can deliver greenhouse gas reductions fast and efficiently and accelerate the energy transition. We need to replace polluting sources of energy with renewable ones, provide access to energy to communities and unlock further funding for sustainable models. Ultimately, we aim to unite countries and communities in urgent action to tackle the climate crisis, reduce 1 billion tons of greenhouse gas emissions and, by doing so, we hope to positively impact the lives of 1 billion people,” he said.
“Millions of lives and trillions of dollars have been lost to Covid 19, forcing people back into poverty after decades of progress. The effects of the climate crisis will make this even worse, which is why we must invest now to reverse this downward spiral,” said Rockefeller Foundation President Dr. Rajiv J. Shah.
“Big, bold, and pioneering collaboration and investment is required not only for the short term, but also the long term, to galvanize a better future. That is why we are announcing our largest commitment to date and joining forces with IKEA Foundation to double that investment. Our partnership will unlock the financing and resources that are essential to provide clean, reliable electricity that improves the lives and livelihoods of people everywhere,” Dr. Shah added.
IFC in the building
Last week, the Rockefeller Foundation announced a groundbreaking partnership with the International Finance Corporation, the private sector arm of the World Bank Group, to use $150 million of RF’s catalytic capital in blended finance solutions to mobilize up to $2 billion of private sector investment in distributed renewable energy solutions.
The partnership will prioritize countries in Sub-Saharan Africa and select other regions. Most of the initial funding will go toward IFC’s prototype scaling mini-grid program, as well as distributed renewable energy generation, battery energy storage, and other innovative clean energy technologies.
