Press release | Date: 08/10/2018
‘The lack of access to energy is still a barrier for international development. The Government has therefore increased its grants towards renewable energy from NOK 570 million in 2018 to more than NOK 1 billion in 2019. In addition, we are stepping up our support to Norfund’s (Norwegian Investment Fund for Developing Countries) investments in renewable energy.
The proposed increase means support for renewable energy would more than double from NOK 495 million in 2017 to more than 1 billion in 2019. This is in line with the Government’s pledge in the white paper on international development policy from 2017 (Meld. St. 24 (2016-2017)).
‘A stabile electricity supply is important in order for developing countries to reach their sustainability goals within 2030. Electricity is not just a prerequisite for economic growth. It is also crucial for operating health institutions, for schools to be a part of digital developments, and so that students can do their homework at night. We must ensure that we reach the world’s poorest through our energy initiatives. This means, for example, that Africa will be a very relevant region,’ said Mr Astrup.
Norway is world leading within energy management, energy markets, hydropower, solar power and offshore wind power. Norway’s expertise and industries within these areas are sought after internationally. These advantages should be utilised to reinforce development efforts in the area.
The Minister of International Development has close dialogue with Norwegian companies and expertise-based communities engaged in developing countries. These groups point to a demanding risk picture as the biggest obstacle for investments and increased engagement in developing countries. The industry highlights in particular that the lack of risk mitigation measures, such as guarantees, limits the possibilities for investing in developing countries.
‘We want the most development effect out of every krone we invest. But we also know that energy markets are in a volatile period. Going forward, we must therefore evaluate whether there is a need for new funding models for renewable energy in developing countries. Irrespective, we will actively use our assistance towards risk mitigation measures by, among other things, supporting the build up of regulatory competence in developing countries and expanding the electricity grid,’ said Mr Astrup.
On top of the NOK 1 billion increases for renewable energy comes the contribution towards Norfund. In the international development policy white paper, the Government pledged to increase its contribution to Norfund by 50 % within the next parliamentary term. The 2018 Government budget increased the capital contribution to Norfund by NOK 187.5 million and will be increased by a further NOK 187.5 million in the 2019 budget. In total, NOK 1.875 billion in new assets will be transferred to Norfund in 2019.
‘Norfund fulfils the criteria that roughly half of added capital should be renewable energy investments. This makes Norfund an important supplement to the Government’s funding for renewable energy,’ said Mr Astrup.