In the article published on December 2nd, in OPEC Bulletin Roman Marshavin and Alexey Morozov are discussing challenges facing developing countries on the path to low carbon future. With renewable generation largely being an intermittent power source, fossil fuel (most often gas-based) baseload generation still remains one of the very few affordable and reliable sources of electricity for developing world. As availability of international financing for fossil fuel-based energy projects is shrinking due to environmental concerns, developing countries are often left with little or no choice when it comes to financing development of their energy sectors. The authors suggest launching a discussion on establishing a multilateral bank that could help solve those issues, while paying utmost attention to the environmental challenges and countries’ commitments according to the Paris Agreement.
According to Roman Marshavin and Alexey Morozov, such Bank could enable developing countries to finance reliable and cost-efficient power sources, while at the same time enabling just transition. The Bank could provide countries with so much needed financing and leveraging tools to financially back the fossil fuel-based facilities. Those funds may be used for example, for developing environmentally conscious gas-powered generation, helping countries minimize natural-gas related emissions through development of low-carbon gases or carbon management solutions, or deploying technologies at the existing fossil-fuel based facilities that could reduce their carbon impact. At the same time, a specifically designed, transparent governance structure with independent board of environmental experts, would ensure that this financing is used efficiently, prudently and the best balance is achieved between the countries’ national priorities, their NDCs and the interests of the global community.