Thinking Outside the Box: Deepening Private Sector Investments in Fiji’s Nationally Determined Contributions through Scenario Analysis

Jale Samuwai,Evanthie Michalena,Jeremy Maxwell Hills

doi:10.3390/su11154161

Jale Samuwai, Evanthie Michalena + Show 1 more

Open Access

https://doi.org/10.3390/su11154161

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Abstract

Private finance is seen as the financing panacea for resourcing the nationally determined contributions (NDC) submitted by 170 countries to the United Nations (UN) system. Mobilizing private investment is challenging, especially for vulnerable Pacific Island Countries (PICs). Fifteen PICs have already submitted ambitious NDC targets, in which transition towards a sustainable energy environment through investment in renewable energy (RE) is central. Presently, RE investments in PICs are primarily external donor financed, however, reliance on limited and uncertain external finance is unlikely to deliver the required energy transition. A future scenario methodology was used, with Fiji as a case-study; the analysis provided insight into alternative trajectories towards transition. Based on the scenario analysis, an NDC resource mobilization framework was developed. Conclusions suggest that donors should re-orientate their priorities from investments in RE installations, towards investments that upgrade the current RE readiness levels and promote a long-term perspective of “organically growing” the local private RE sector. Channeling resources to target initiatives that will endogenously grow the domestic private sector is critical for PICs, as well as other developing countries, which represent a majority of the NDCs, and which are projected to dominate global growth in energy demand for decades to come.

Highlights

“Why is it that private investment in renewable energy (RE) is not forthcoming for Pacific Island Countries (PICs)?”
Considering the major climate finance windfall and the high degree of uncertainty of climate finance availability that currently exists in the international climate finance architecture, the “billion-dollar question” relates to how Fiji would attract sustainable funding to implement its nationally determined contributions (NDC)
With private finance being identified as the recourse for such a shortfall to fully unlock its potential, the government of Fiji (GoF) and its donors need to strategically channel limited public finance in a sustained manner, which will mobilize domestic private finance in the long run

Summary

Introduction

“Why is it that private investment in renewable energy (RE) is not forthcoming for Pacific Island Countries (PICs)?”. A huge public climate finance gap, exists, which hinders the global implementation of NDCs [6]. While developed countries have committed to mobilizing 100 billion USD a year from public and private sources by 2020 [1], they, did not commit towards individual financial targets. Countries like the PICs must rethink strategies on how to attract and mobilized new and innovative resources that will source sustainable finances to implement their NDC. The suitability and the success of strategies that stimulate private sector investments have been a “mixed bag” across developing countries, because of the heterogeneous nature of countries’ climate change and economic context [15]

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