The Rockefeller and IKEA foundations have announced a partnership to launch a $1 billion global initiative to catalyze investments in distributed renewable energy.

With the aim of reducing a billion tons of greenhouse gas emissions and providing a billion people with distributed renewable energy through mini-grid and off-grid solutions, the initiative will be run as a public charity designed to deploy catalytic capital more efficiently and at scale that supports the expansion of local renewable energy projects. To facilitate the joint investment, the Rockefeller Foundation will incubate the platform in RF Catalytic Capital Inc., which the foundation launched in 2020.

According to the Financial Times, the foundations have pledged $500 million each in risk capital with the goal of attracting $10 billion in investments from international development agencies this year in support of renewable energy. As part of the effort, the Rockefeller Foundation announced a partnership with the International Finance Corporation last week to help catalyze up to $2 billion in private-sector investment in support of distributed renewable energy solutions. The fund will be opened up later to institutional investors for investments in individual projects in countries including Ethiopia, India, and Nigeria.

"If global energy consumption doesn't change from fossil fuels to renewable energy, we will not meet the Paris Agreement ambitions, and millions of families will be left behind in poverty," said IKEA Foundation CEO Per Heggenes. "We need to be honest and recognize that the current approach is not delivering the impact the world needs in the time that we have."

"Big, bold, and pioneering collaboration and investment is required not only for the short term, but also the long term, to galvanize a better future," said Rockefeller Foundation president Rajiv J. Shah. "That is why we are announcing our largest commitment to date and joining forces with IKEA Foundation to double that investment. Our partnership will unlock the financing and resources that are essential to provide clean, reliable electricity that improves the lives and livelihoods of people everywhere."