Scaling the Peace Renewable Energy Credit: Supporting renewable energy in conflict settings
THE CHALLENGE
Climate change has dire consequences for populations in fragile states, who are not only climate vulnerable but also often conflict-affected and energy-poor. Of the more than $300 billion in global renewable energy investment, only 6% goes to the Middle East and Africa, with fragile states receiving a small fraction of this. This deepens existing energy insecurity while pushing poverty-affected communities to rely on unclean fuel sources such as wood and charcoal, the combustion of which has significant health and environmental consequences. Where renewable energy is available, it is typically beyond the financial reach of the poorest communities. This further impedes their development prospects while hampering the capacity for economic recovery from conflict-induced damages.
THE SOLUTION
To support the development and adoption of renewable energy in fragile settings, Energy Peace Partners (EPP) created the Peace Renewable Energy Credit (P-REC). P-RECs are designed to leverage the $1 billion Renewable Energy Credit (REC) market to 1) link private sector renewable energy investments to conflict settings; and 2) create new revenue streams and economic incentives to support clean energy project development in places that lack other incentives. EPP successfully facilitated two P-REC transactions in DRC, both implemented by partner and fellow HGC-funded innovator Nuru. The first P-REC transaction, purchased by Microsoft, allowed for the installation of night-time streetlights in the Ndosho neighborhood in Goma. Estimates of some 28,000 residents have now benefited from the additional safety and security provided by the streetlights, and approximately 72% of the businesses in the neighborhood have reported being able to operate longer hours into the evening. EPP’s second project involved the construction of two small rural solar mini-grids near Garamba National Park in northwest DRC, including a pre-purchase of 5-years’ worth of P-RECs, which Nuru will use to help finance the construction of the grids. Most recently, a third P-REC was purchased by Block under which EPP partnered with IOM to launch a solar project to electrify health clinics in an IDP camp in Malakal, South Sudan. This has paved the way for future catalytic funding deals, with conversations already underway with several UN agencies.
