Nuru Lama

Nuru Lama. Photo: Courtesy of Nuru Lama

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Nuru Lama, an IFC principal investment officer and acting manager for global energy, helps coordinate the corporation’s $7 billion energy program. Everything he does, he says, is influenced by climate change. He believes that the current rapid expansion of renewable energy will only continue to grow, and that technological innovation is helping to accelerate its impact in reducing the harm from global warming.

Q: What are the big trends that you see now in the energy sector?

A: The biggest trend in recent years has been the impressive decline in renewable costs, making it highly competitive as an energy source. We’re looking now at really cheap solar and wind power, often at 3-4 cents per kilowatt hour or even lower in places like Egypt, India, and Uzbekistan.

Innovation in the energy space is truly exciting. Battery storage, distributed generation, offshore wind, and green hydrogen are gaining pace in emerging markets. All are essential for addressing climate change. The electrification of transport–or e-mobility–and other sectors will create more energy demand. I think the energy space will be amazing to watch and be involved in for the next five to 10 years.

Q: Where do you expect a growth of business in renewable energy in the next few years?

A: We are seeing renewable opportunities across all regions, with more opportunities in larger, established energy markets. From plain vanilla solar or wind, we are now financing hybrids with battery storage, and helping to develop green hydrogen opportunities. We just helped finance our first sustainability linked bond with Sembcorp Industries in Singapore–this could be a new area of major growth. What we really need to do is scale the business, replicate models, and attract more financing.

At the same time, we need to increase the supply of projects to finance. This will require solving bigger issues, such as sector reform and creating robust transmission and distribution grids. But it also means rolling up our sleeves to help develop projects. In that regard, our focus on what we call working Upstream–which can be taking a great idea and working on it until it becomes a project–is yielding results. For example, we are trying to replicate the success of Scaling Solar to launch a Scaling Wind initiative. Another challenge is to ensure reliable power supply. Cheap and clean wind and solar are great, but they are not reliable. So we are trying to finance technologies that balance solar and wind, as we push to find substitutions for coal.

Q: How is IFC best positioned to help push the climate agenda in energy?

A: Renewables is at the heart of IFC’s energy strategy, representing 70 percent of our power generation portfolio. We have financed over 15,000 megawatts of renewables in the last 10 years and have a big appetite for innovation. We have a full suite of tools to support clean technology investments–from early-stage project development, an established corporate and project financing practice, financing innovation and capital mobilization, and using blended finance in some cases to de-risk investment. We are also keen to support coal phase out, both to promote early retirement of coal-fired power plants and to replace them with cleaner options.

Published in November 2021