IKEA Foundation, the charitable arm of the world’s biggest furniture retailer IKEA and the Rockefeller Foundation, a US-based private foundation said that they have planned to set up a $1-billion fund to support renewable energy programs in developing nations.
The fund, which is planned to be launched this year, aims to reduce one billion tons of greenhouse gas emissions and empower one billion people with distributed renewable energy, the foundations stated in a joint statement.
Each foundation will provide $500 million of risk capital and in addition, they hope to attract funds of about $10 billion this year from international development agencies, before opening up to institutional investors in their bid to widen the renewables investment in countries such as India, Nigeria, and Ethiopia.
According to reports, Rajiv Shah, president of the Rockefeller Foundation stated that “this can be commercially viable. There’s $1 billion taking risk upfront, and that can unlock tens of billions of dollars. We’re not gambling here. We’ve seen it work in India. We know what it takes to become successful.”
Per Heggenes, CEO of IKEA Foundation, stated that if global energy consumption doesn’t change from fossil fuels to renewable energy, the world will not meet the Paris Agreement ambitions and “we need to replace polluting sources of energy with renewable ones, provide access to energy to communities and unlock further funding for sustainable models.”
The foundations have already signed agreements with the International Finance Corp, an organization affiliated with the World Bank, and the US International Development Finance Corp, according to the report.
IKEA aims to be climate positive by 2030, and Ingka Group, the owner of most IKEA stores and it had earmarked $4.75 billion to invest in green energy projects.