Michael Bloomberg Plans a $242 Million Investment in Clean Energy

Source: By Maggie Astor, New York Times • Posted: Tuesday, May 17, 2022

The billionaire and former mayor of New York City will fund programs in 10 developing countries.

A coal-fired power station in Metsimaholo, South Africa, about 65 miles south of Johannesburg. The country is one of 10 targeted in Michael R. Bloomberg’s initiative.
Gulshan Khan for The New York Times

Michael R. Bloomberg, the former mayor of New York City, will announce a $242 million effort on Tuesday to promote clean energy in 10 developing countries.

The investment is part of Mr. Bloomberg’s push, announced last year, to shut down coal production in 25 countries and builds on his $500 million campaign to close every coal-fired power plant in the United States. The announcement is tied to a gathering this week in Rwanda hosted by Sustainable Energy for All, an international group working to increase access to electricity in the global south.

The money will fund programs in Bangladesh, Brazil, Colombia, Kenya, Mozambique, Nigeria, Pakistan, South Africa, Turkey and Vietnam. Representatives of Bloomberg Philanthropies and partner organizations, including Sustainable Energy for All and the ClimateWorks Foundation, said they would work with local governments and businesses to develop spending plans.

Helen Mountford, the president and chief executive of ClimateWorks, said that specific ways Mr. Bloomberg’s money could be spent include research and analysis, public education campaigns, clean energy pilot programs and buyout payments to close existing coal plants.

“Which strategies are appropriate for each country will really be guided by the in-country partners who know them best,” Ms. Mountford said. “The first approach is to identify the relevant strategies per country and to start to identify who can help to deliver those and move those forward and get the funding to the ground.”

Success in the 10 nations would demonstrate to other countries that renewable energy can help, not hinder, economic growth, Mr. Bloomberg said in an interview by email. “The alternative is to meet growing energy needs by burning more coal, which would have disastrous consequences for public health and for the battle against climate change,” he said.

Climate campaigns tend to focus on industrialized countries, which are responsible for the vast majority of greenhouse gas emissions. But many developing countries have rapidly growing populations and economies, and rapidly increasing energy needs. How nations meet those needs will be a major factor in whether the world can decarbonize fast enough to avoid the worst consequences of a warming planet.

Developing countries “haven’t reached their peak in the amount of energy they actually need,” said Damilola Ogunbiyi, chief executive of Sustainable Energy for All. “We have a unique opportunity to drive that energy source being renewable from the start instead of going back again in another 30 years and try and transition them out of unsustainable sources of power.”

More than 750 million people worldwide lack electricity, and energy poverty is a powerful driver of economic and health inequality. Although Mr. Bloomberg’s investment is meant to combat climate change, Ms. Ogunbiyi said the funds could also help address a variety of crises caused or worsened by the lack of electricity, among them food scarcity and poor medical care.

“It’s important to understand that this is a crisis on its own,” she said. “People not having access to electricity or clean cooking isn’t an inconvenience. It’s the difference between life and death for a lot of people, and it needs to be treated as an emergency.”

Total investments in clean energy in developing countries were less than $150 billion in 2020, according to a June 2021 International Energy Agency report, which warned that, by the end of the decade, such financing needed to be more than $1 trillion per year to put the world on track to reach net-zero emissions by 2050.

Ms. Ogunbiyi said that as Sustainable Energy for All and other organizations work with the 10 countries to create energy transition plans or update existing ones, they would encourage the countries’ leaders to sign “no new coal” pledges.

The idea behind the type of investment Mr. Bloomberg is making is that a philanthropic organization like his takes on the biggest risk early in a project that decision makers might otherwise be skeptical about, and if it works, the project will become attractive to conventional investors later, said Rachel Kyte, dean of the Fletcher School at Tufts University and a former chief executive of Sustainable Energy for All.

Even if Mr. Bloomberg’s money can lower financial barriers, the political barriers remain formidable. The fossil fuel industry’s deep opposition to renewable energy development “is a huge obstacle,” said Tom Sanzillo, the director of financial analysis at the Institute for Energy Economics and Financial Analysis.

But what funding like Mr. Bloomberg’s can do is create foundations upon which a transition to renewable energy from fossil fuels becomes the smartest financial decision for companies. That means increasing the risk involved in fossil fuel development, Mr. Sanzillo said. It also means decreasing the risk involved in renewable energy development.

“I think that, overall, the market forces are on Bloomberg’s side,” Mr. Sanzillo said. “If he’d done this 10 years ago, I probably would’ve said it might not work. I think here you have a better wind at your back.”