The European Commission last week (6 October) said it would dedicate US$100 million to help developing countries adopt energy-efficient technologies and make more use of renewable energy to combat air pollution and climate change.
The Global Energy Efficiency and Renewable Energy Fund will help overcome the difficulties of raising enough commercial funding for such projects by providing new risk-sharing and co-financing options to attract international and domestic investors.
"The lack of access to energy is a major obstacle for regions that already experience problems in accessing capital," says European commissioner for development, Louis Michel.
"This fund can mobilise private investments and become a real source of development, especially in Africa."
According to the International Energy Agency, it is possible to reduce global demand for electricity by one third — simply by improving overall energy efficiency.
The agency says the growing demand for oil could be halved by increasing renewable energy's contribution to the world's electricity needs from today's 13 per cent to 34 per cent in 2050.
This would decrease the impacts of energy generation on the environment, by reducing levels of carbon dioxide emitted to the atmosphere.
The European Commission will kick-start the fund with a contribution of up to US$100 million over the next four years, and expects that financing from other public and private sources will boost it to at least US$125 million.
The fund will also help create regional sub-funds for Africa, Asia, the Caribbean and Pacific region, Latin America, North Africa and non-EU Eastern Europe. These will be tailored to regional needs and will focus on smaller projects ignored by commercial investors.European commissioner for the environment Stavros Dimas says the innovative mechanism will help bring "clean, secure and affordable energy supplies to the 1.6 billion people around the world who have no access to electricity".