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PARTNERSHIPS ARE KEY Effective partnerships are central to the OPEC Fund’s ap- proach to clean cooking. The OPEC Fund works with other development partners and financial institutions to draw on their knowledge and capabilities. Acting as a collaboration hub, the OPEC Fund leverages the strengths of its partners and its unique position as a South- South-focused institution. This approach is exemplified by its close work across all operations with peer MDBs and other prominent development agencies, including fellow members of the Arab Coordination Group (ACG). The OPEC Fund Climate Finance and Energy Innovation Hub (see Box 16) is one example of a partnership launched to lev- erage financial and technical knowhow in support of access to clean energy, including modern cooking. The OPEC Fund uses a range of financing instruments to sup- port the scaling up of clean cooking. It offers grants to sup- port partner countries with research and analysis, the devel- opment of integrated energy access plans and the adoption of supporting policies and regulations. It offers a combination of grant and debt finance to help clean cooking enterprises develop their supply chains. It can also deploy instruments
such as results-based finance, blended finance, repayable grants (zero-interest loans) and first-loss credit guarantees to unlock access to carbon finance and private investment.
CLOSE COLLABORATION WITH PARTNER COUNTRIES
In line with its principle to develop projects that reflect the characteristics of each partner country, the OPEC Fund works closely with governments to support country-led pro- jects that maximize development impact. The OPEC Fund is currently working with the government of Madagascar and UNIDO on an integrated approach to clean cooking. Madagascar is one of the most important frontier markets for clean cooking. It is home to 5 percent of the world’s biodiversity with an extraordinary array of plants and animals that are unique to the island. 125 This rich biodiversi- ty is at critical risk from deforestation, and one of the key drivers of deforestation is the charcoal industry that supplies traditional cookstoves. Furthermore, the southern part of the island is currently experiencing what many interested par- ties are calling the world’s first climate change-induced fam- ine. 126 Currently, just 1.6 percent of the population has access to modern cooking fuels, 127 and household air pollution ac- counts for around 17,000 deaths annually. Clean cooking is a
The Climate Finance and Energy Innovation Hub is a partnership launched in June 2022 by the OPEC Fund for International Development, the United Nations Capital Development Fund (UNCDF) and SEforALL to accelerate access to clean and af- fordable energy in development countries. The In- ternational Renewable Energy Agency (IRENA) and the Arab Bank for Economic Development in Afri- ca (BADEA) have joined as partners. The hub is a policy and finance global platform with a focus on using innovative finance solutions to mobilize addi- tional capital into sustainable energy investments. It also helps to promote innovative business models and to foster new financing partnerships and blend- ed financing mechanisms. With ongoing projects in DR Congo, Madagascar, Tanzania, Malawi and Rwanda, the hub is helping countries to advance clean cooking within their integrated energy plans. BOX 16: THE CLIMATE FINANCE AND ENERGY INNOVATION HUB
125 World Resources Institute, Madagascar, http://www.thaglerfoundation.org/ madagascar.html 126 United Nations, “Madagascar: Severe drought could spur world’s first climate change famine”, UN News, October 2021, https://news.un.org/en/ story/2021/10/1103712
127 World Bank, Access to clean fuels and technologies for cooking (percent of population) – Madagascar https://data.worldbank.org/indicator/eg.cft.accs. zs/?locations=MG
AN OPEC FUND KNOWLEDGE SERIES REPORT 2024
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