Financing renewable energy technologies in BRICS

Abstract

As the BRICS countries strive to promote sustainable economies, they also prioritise equitable economic growth. The energy sector is a crucial driver for BRICS to transition to sustainable economic growth. Traditionally, the BRICS countries depended on fossil fuels to generate electricity, including coal, natural gas and oil. However, the transition to renewable energy (RE) has become an important policy priority for BRICS. A significant obstacle to pursuing a diversified energy mix consistent with climate policies such as nuclear, shale gas, coal and RE is the availability of sustained capital flows. However, the BRICS bloc has signalled its interest in transitioning from fossil fuels to RE sources. Financing of this transition to renewable energies has been a primary challenge limiting the diversification of BRICS's energy mix. The lack of funding causes concerns over the economic feasibility of such energy projects. Investors are also deterred from projects not located in areas with supportive policies on renewable energies. This chapter describes potential strategies to overcome these two barriers that may promote increased investment in the RE sector and offers recommendations to policy-makers across BRICS.