With the support of the Italian Ministry for Environment and Territory, the United Nations Environment Program (UNEP) has begun a new initiative in the Southern Mediterranean region aimed at fostering increased investment in the renewable energy sector. The MEDREP Finance initiative is part of the Mediterranean Renewable Energy Programme (MEDREP) launched at the World Summit on Sustainable Development (WSSD) in Johannesburg, and involving the International Energy Agency, the Observatoire Méditerranéen de l'Energie (OME) and the Mediterranean Association of the National Agencies for Energy Conservation (MEDENER). The initial country focus of MEDREP Finance includes Egypt, Morocco and Tunisia, with possible expansion to other Mediterranean countries at a later date.
The key objectives of MEDREP Finance are to investigate different approaches for positively influencing finance flows to renewable energy companies and projects in target countries, to structure various support mechanisms that help lenders and investors scale up financing to this clean energy sector, and to help establish a regional RET market in the Mediterranean region.
Tunisia, Morocco, and Egypt are the first three Mediterranean countries to be reviewed for the programme. It is envisaged that in future other southern Mediterranean countries will also be added.
Based on stakeholder consultations and an assessment of existing barriers to investment, UNEP will identify and implement targeted financial support mechanisms that help financiers scale up lending to and investment in this sector. Examples of possible mechanisms include seed or patient capital funds, interest rate buy-downs, guarantee facilities and investment advisory support facilities. Parallel activities will also be undertaken to help financiers become more aware of renewable energy investment opportunities, to streamline and lower transaction costs, and to assess and manage the risks and returns associated with the deployment of these new technologies.
As the first step in a longer-term initiative, the project sets the stage for large-scale financing of renewable energy projects as an essential part of an overall effort to promote regional renewable energy markets. Although focusing on Mediterranean countries of North Africa initially, if successful the approach could provide a model for expansion to other areas, possibly including countries in Central and Eastern Europe.
Huge capital investments will be required in the coming decades to meet the world's increasing energy requirements - UNEP is working to ensure that an increasing share of these investments are made in an environmentally friendly way.