In Uruguay, the Joint SDG Fund's support to the United Nations development system for a just green transition focuses on promoting innovations in climate financing, specifically, investments in the renewable energy sector that also nurture social inclusion, advance gender equality and generate new capabilities at the local level.
Although almost all of Uruguay’s electricity is derived from renewable sources, the country’s primary energy matrix is still 37% dependent on fossil fuels. Committed to reducing the country’s greenhouse gas emissions, the Government of Uruguay aims to implement a second energy transition towards the use of innovative low-carbon technologies to increase the efficiency of its national electricity system. The transformation of the transportation sector by transitioning from fossil fuels through the gradual substitution of nonrenewable energy in the industrial, residential and commercial sectors are the two main strategies supporting this transition.
The Joint SDG Fund is supporting the design and set-up of the Renewable Energy Innovation Fund (REIF), whose purpose is to promote a new energy transition with investments that encourage competitiveness in the energy sector, nurture social inclusion, advance gender equality and generate new capabilities at the local level.
REIF is a proof of concept for sustainable investing, forging a new pathway for cooperation between development actors, the public sector and commercial banks. It combines funds from local banks and the United Nations to provide loans with flexible terms and conditions to businesses, including SMEs, that are adapted to the challenges of carrying out innovative and sustainable investments. Building on the expertise of UNIDO, UNDP and UN Women, the Resident Coordinator has played a pivotal role in convening the diverse network of partners to work jointly in creating an inspiring public-private partnership to accelerate Uruguay’s inclusive climate agenda.
With a strong emphasis on gender, at least 45% of the REIF’s investments are allocated to projects that have clear policies and actions to advance gender equality and women’s economic empowerment. The development and deployment of low-carbon technologies supported by the REIF is leading the progressive decarbonization of the industry and transportation sectors in Uruguay.
The REIF focuses on activating large-scale financing accompanied by technical assistance for businesses, including SMEs, that support new and emerging green projects that drive the second energy transition around 4 main areas:
- Electric Mobility: Technologies and infrastructure for electric mobility including electric buses, light-duty electric vehicles, electric utility vehicles, electric passenger vehicles, as well as the development of charging facilities.
- Energy storage and demand management: Technologies aimed at improving imbalances between renewable energy supply and demand and improving system efficiency through new energy storage technologies.
- Power to X: Technologies aimed at transforming electrical energy into another type of energy with storage capacity such as electric boilers and technologies that use electricity for hydrogen generation.
- Waste management and treatment: Includes technologies for battery recycling and management, biogas and combustion of organic waste as boiler fuel.
With an initial capitalization of US$7 million, coupled with guarantees, investment subsidies, tax incentives and other public incentives, REIF is leveraging US$68 million from the local banking sector. REIF loans that invest in various energy transition projects range between US$30,000 - US$100,000, unlocking the great potential for exponential leverage, growth, job creation and poverty reduction.
Learn more about other examples of what the UN is doing to support this transition:
- Transforming Global Energy Access | UN Joint SDG Fund (jointsdgfund.org)
- Energy access and affordability: Powering ahead to 2030 | United Nations DCO (un-dco.org)
Note:
The Joint SDG Fund's joint programmes are under the prestige leadership of the Resident Coordinator Office and implementing United Nations Agencies. With sincere appreciation for the contributions from the European Union and Governments of Denmark, Germany, Ireland, Italy, Luxembourg, Monaco, The Netherlands, Norway, Portugal, Republic of Korea, Spain, Sweden, Switzerland and our private sector funding partners, for a transformative movement towards achieving the SDGs by 2030.
