U.S. International Development Finance Corporation (DFC) on Friday, September 24, 2021, announced its support for the United States Energy Compact. The announcement was made by U.S. Special Presidential Envoy for Climate John Kerry at the UN High-Level Dialogue on Energy (HLDE).
The Compact highlights voluntary commitments and actions by the U.S. government to advance progress towards achieving Sustainable Development Goal (SDG) Seven on Affordable and Clean Energy. DFC support joins commitments from other U.S. government agencies including the Departments of State, Energy, and Transportation, and the U.S. Agency for International Development (USAID).
To advance the Biden-Harris Administration’s commitment to addressing the climate crisis, the U.S. Energy Compact brings together ambitious initiatives from across the U.S. government. Under the Compact, U.S. agencies will work together to reduce domestic emissions, and in recognition that more than 85 percent of emissions come from beyond U.S. borders, assist other countries to set and achieve ambitious energy-related climate goals and step up international leadership on climate action.
“Following the President’s historic announcements on climate, we are thrilled to support a U.S. Energy Compact that will help our partners in emerging markets build more resilient economies and achieve the goals of the Paris Agreement,” said DFC’s Chief Climate Officer Jake Levine. “DFC’s unique financing tools, alongside those of our interagency and private sector partners, have the power to make a real impact to advance climate mitigation, resiliency, and adaptation in the developing world.”
In support of the U.S. Energy Compact, DFC will make one-third of all its development finance commitments focused on climate-related projects beginning in fiscal year 2023, leading to highly impactful investments in low and lower-middle income countries. The agency will reach net zero emissions through its investment portfolio by 2040. DFC also aims to increase energy access to at least 10 million people by 2025, as prioritized in its development strategy, the Roadmap for Impact. Alongside these commitments, DFC is collaborating closely with other development finance institutions as well as interagency partners to bolster its climate project pipeline, helping developing countries tackle climate change and related challenges.
Climate change is impacting every country on Earth, but has a disproportionately significant impact on developing countries that already struggle with poverty, food insecurity, and lack of access to energy and connectivity. They are also more vulnerable to natural disasters. DFC’s development mandate, combined with its diverse financing tools, make the agency an essential component to confront the climate crisis. By identifying the right opportunities for financing and enabling private sector investment in climate solutions, DFC actions aim to take advantage of a rapidly closing window of opportunity to tackle climate change globally while continuing to support sustainable economic growth in developing countries.