The recent energy crisis in Europe and Central Asia (ECA) has prompted a decisive response from the World Bank. To address the region’s overreliance on fossil fuels and vulnerability to supply shortages and price shocks, the World Bank has launched a new $2bn program aimed at accelerating the scaling up of renewable energy.
The 10-year Europe and Central Asia Renewable Energy Scale-up (ECARES) program, unveiled recently, is poised to enhance energy security, improve energy affordability for households, and aid countries in fulfilling their commitments under the Paris Agreement. With a target of deploying 15 GW of renewable energy capacity, the initiative also aims to foster the regulatory environment, institutions, and business models necessary to sustainably scale renewable energy well into the next decade.
Europe and Central Asia’s transition to clean energy is seen as crucial to the region’s economic future, energy affordability, security, and global climate commitments. Despite some progress in the clean energy transition, fossil fuels still dominate the region’s energy mix, accounting for over 80%.
The ECARES program targets key bottlenecks common among ECA countries, focusing on three pillars: creating an enabling regulatory environment, modernizing and digitizing power grids for renewable energy integration, and developing innovative financing and risk mitigation mechanisms to attract private capital.
Moreover, the transition to clean energy is anticipated to foster long-term economic growth, potentially increasing renewable energy employment from 200,000 to over 900,000 by 2040, according to recent modeling.
Recognizing the necessity of investments and robust partnerships, ECARES will establish a regional knowledge platform to facilitate mutual learning among countries, encourage replication of successful practices, and attract the capital and technical support needed. The World Bank's convening power will be instrumental in bringing together various stakeholders including governments, international financial institutions, commercial banks, and private sector partners to deepen market integration.
Turkey has become the pioneer country to pilot a project within the ECARES program, aiming to double its renewable energy capacity by adding 60 GW of solar and wind energy by 2035. The initial phase of the project involves a $657mn financing facility to accelerate the market creation for distributed solar energy.
To date, eight countries across the region have expressed interest in joining the ECARES program, with others encouraged to participate. The program embarks on a seven-year commitment period, during which more projects are expected to be added to the agenda over the 10-year implementation plan.
Additionally, a complementary regional energy-efficiency initiative is being developed to run alongside ECARES, aimed at mobilizing resources for the clean energy transition by fostering partnerships and promoting economies of scale. These initiatives align with the World Bank’s vision of creating a world free of poverty on a livable planet.
The ECARES program capitalizes on various opportunities to scale up renewable energy, leveraging the declining costs of renewable technologies, the digitization of energy grids, and the region's shift towards an integrated electricity market. Renewable sources such as solar, wind, hydro, and bioenergy are becoming increasingly cost-effective, either currently or in the near future.
The road to truly sustainable energy security necessitates a shift towards renewable energy. While only nine countries in the region have committed to achieving carbon neutrality targets by 2050 to 2060, 18 countries have signed the COP 28 pledge to triple renewable energy and double energy efficiency by 2030.
Achieving carbon neutrality demands ambition, targeted measures, investments, and extensive collaboration. The ECARES program stands as a beacon of support, aiding countries in transforming the energy landscape in Europe and Central Asia, and paving the way towards a brighter future.
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