Putting Promises Into Practice: Clean Energy Transition Partnership signatories' progress on implementing clean energy commitments

At the 26th Conference of the Parties (COP 26) of the United Nations Framework Convention on Climate Change in November 2021, 34 countries and five public finance institutions signed a joint commitment to end international public finance for fossil fuels and instead prioritize international public finance for clean energy: the Clean Energy Transition Partnership (CETP), also known as the Glasgow Statement on International Public Support for the Clean Energy Transition.

Over the past 2 years, CETP signatories have made significant progress in restricting international fossil fuel finance. In contrast, it is not clear that similar progress has been made on the corresponding commitment to "fully prioritize" support for the clean energy transition.

This report analyzes current trends in CETP signatories’ international public finance for clean energy and policies to support this finance. Its findings:

• The CETP signatories are not yet living up to their potential to shift international public support to clean energy. In the first year of the CETP's implementation, signatories collectively moved a total of USD 6.5 billion out of fossil fuels and USD 5.2 billion into clean energy, compared to the annual average of the previous 3 years. This shift into clean energy is small in comparison to the CETP's potential to shift USD 28 billion in finance to clean energy annually, over and above existing financing levels. Moreover, the overall increase in clean energy financing in the first year of implementation was due to a small number of signatories.
• The signatories who provided the most international public finance to clean energy between 2020 and 2022 were the European Investment Bank (USD 12 billion per year on average), Sweden (USD 3.4 billion), France (USD 2.6 billion), Germany (USD 2.5 billion), and Denmark (USD 2.2 billion).
• All high-income signatories have yet to publish CETP-aligned policies that "fully prioritize" international public finance for clean energy.
• Elements of good practice exist: for example, monetary targets for scaling up clean energy financing are in place at several institutions.
• A common gap across clean energy financing policies is provisions that ensure fair and transformative financing practices, such as the prioritization of highly concessional or grant-based instruments and geographical prioritization for the countries most in need.

CETP signatories still have an opportunity to put into practice their promises to scale up transformative public finance for clean energy and support a just energy transition in line with their fair share of climate action. The report recommends that high-income signatories develop and publish updated policies that support scaling up public finance in clean energy. These policies should follow best-practice elements, including setting ambitious and quantitative targets; prioritizing transformative sub-sectors and recipients most in need; increasing the use of grant-based and highly concessional instruments; supporting a just energy transition; adopting strong human rights and environmental safeguards; and ensuring strong reporting and monitoring, evaluation, and learning. In addition, signatories should use the CETP framework to share best practices, lessons learned, and opportunities for aligning on the strongest possible policies.