Ikea Foundation, the nonprofit arm of the furniture retailer, and the Rockefeller Foundation are planning to create a $1bn global fund to finance renewable energy projects in developing nations.
Each foundation will provide $500m to the fund, which is slated for launch later this year, in a bid to lift more than one billion people out of energy poverty and reduce one billion tonnes of greenhouse gas emissions, the partners said in a statement.
According to the Financial Times, the fund hopes to attract additional funds of up to $10bn this year from international development agencies, before inviting institutional investors to back individual energy projects.
The fund will operate as a public charity, and will focus on developing ‘distributed’ renewable energy projects in emerging nations, in the form of mini-grid and off-grid solutions rather than large centralised power plants.
In doing so, it hopes to help poorer countries leapfrog to renewable energy sources, while also delivering clean and reliable power to communities.
“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,” Per Heggenes, CEO of the IKEA Foundation, said in a statement.
“We need to replace polluting sources of energy with renewable ones, provide access to energy to communities and unlock further funding for sustainable models,” he added. “Ultimately, we aim to unite countries and communities in urgent action to tackle the climate crisis.”