IKEA Foundation and Rockefeller Foundation have joined hands to set up a one billion dollar platform to fight climate change and energy poverty. The fund, which will 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 said in a joint statement.

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“It is a commitment first and foremost to help people have the ability to move out of poverty by accessing renewable energy. It will make a tremendous difference in terms of serving as an alternative to either coal or base power or diesel,” Dr Rajiv J Shah, President, Rockefeller Foundation told CNBC-TV18.

Shah said that the project started years ago in the state of Bihar where they have helped nearly 500,000 people who otherwise would not have access to electricity with low-cost renewable, always-on power. “We have seen how it has changed their lives and we now hope to bring this effort to the world,” Rockefeller Foundation President added.

IKEA Foundation’s CEO Per Heggenes said that they have been working in this space for a few years now. IKEA will continue to see how it can leverage to a significant level by getting governments, international financial institutions, and the private sector to join them in the effort to bring access to clean renewable energy to as many people as possible living in vulnerable communities, Heggenes asserted.

Each foundation will provide USD 500 million of risk capital, according to a Financial Times report. The firms hope to attract additional funds of USD 10 billion this year from international development agencies, before opening up to institutional investors in their bid to expand renewables investment in countries such as India, Nigeria, and Ethiopia, the report added.

Rockefeller Foundation’s Shah told FT that this can be commercially viable. “There's USD 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," he was quoted as saying.

Meanwhile, IKEA aims to be climate positive by 2030, and Ingka Group — the owner of most IKEA stores — said in April it had earmarked 4 billion euros (USD 4.75 billion) to invest in green energy projects.

(With text inputs from Reuters)

(Edited by : Kanishka Sarkar)

First Published:Jun 22, 2021 1:01 PM IST