A recent Multilateral Cooperation Center for Development Finance (MCDF) workshop highlighted the economic and climate resilience benefits when developing countries connect their energy grids.

Regional power grids allow countries with few renewable power resources to access energy from countries with more plentiful sources – evidenced by Singapore’s recent grid connection with Laos to tap its abundant hydropower.

Around 120 people from 29 countries joined the two-day, online discussion held on 18 and 19 October. It was the fourth in MCDF’s five-part Workshop Series on Climate Smart Connectivity Infrastructure – the Road to Sharm El-Sheikh. MCDF and Egypt’s Ministry of Finance is collaborating in the workshop series with the Asian Infrastructure Investment Bank, Islamic Development Bank, Vulnerable Twenty Group, World Bank and World Resources Institute.

A number of workshop participants said while there has been progress in expanding sub-regional energy connectivity based on renewable power - mostly bilateral one-way trade - there is an enormous opportunity to scale up to regional markets and multiply trade links.  This also makes sense economically. An Islamic Development Bank representative highlighted the savings based on improved efficiencies, totaling 3,000 MW, from a bank-funded project connecting Egypt and Saudi Arabia’s grids.

The workshop also emphasized the economic benefits from increasing the climate resilience of electricity grids. While annual damages to energy systems due to natural disasters is currently estimated at close to USD 10 billion a year, there are far reaching costs to economies, businesses and households – which lose between USD 187 to USD 385 billion a year. Climate change will increase these costs exponentially if power grids are not made more climate resilient.

Beyond economic gain, the move to renewable energy  and the electrification of transport and other industries is urgent as fossil fuel-generated power currently accounts for over 75 percent of greenhouse gas emissions.

The workshop series will culminate in a high-level event on Climate Finance Day at COP27 on 9 November in Sharm El-Sheikh, Egypt. It will draw together the findings of previous workshops which have included investigations of how to make connectivity infrastructure climate smart in the maritime and land transport sectors.

See the MCDF website to learn more about our high-level event at COP27 or contact secretariat@themcdf.org if you would like to access resources from past workshops hosted on our JIGSAW platform - MCDF’s novel digital tool which shares information between stakeholders focusing on high-quality infrastructure and connectivity.