x Abu Dhabi, UAESaturday 20 January 2018

$8.5m cash shortage at Irena

While the UAE pays nine times its due, wealthy nations hold back on payments, hampering Irena's efforts to promote renewable energy.

ABU DHABI // The world's richest countries have left the International Renewable Energy Agency (Irena) short of cash only 18 months after its creation. The Abu Dhabi-based agency, which has a mandate to encourage the growth of renewables around the world, "decided to postpone non-essential operational expenditure" last month as it faces a "temporary" deficit of US$8.5 million (Dh31.1m) in its $13.1m budget, according to Hélène Pelosse, the interim director general.

The funding crunch - familiar to many UN agencies and similar organisations funded from voluntary contributions by governments - has complicated Irena's aim to raise its profile this year. Some of the delays are because 118 member states signed but have yet to ratify the Irena statute, such as the US and Switzerland. Others, including South Korea and Japan, ratified but did not pay their share of the budget.

Ms Pelosse said the shortage of funds was temporary and that contributions would become mandatory for member states early next year, when the group holds its first official assembly and the Irena statute becomes legally binding. "I called for member states' contribution three times," she said in a statement. "During the administrative committee, which was held in June, I alerted the member states that this situation could lead to a cash shortage."

Some states, including the UAE, answered the call and contributed more than expected under a UN funding formula based on the size of each country's economy. The UAE gave nine times the contribution listed by the formula, according to figures available on Irena's website, on top of even larger donations last year. "The UAE has been a very strong supporter of Irena," Ms Pelosse said. Other countries, including France and the UK, have contributed funds even though they are not among the 31 countries that have ratified the Irena treaty. The treaty came into force on July 8, following 25 ratifications from 148 countries that signed it.

Ms Pelosse did not detail how the funding deficit had affected Irena's operations. "The impact on the 2010 work programme is under discussion," she said. But the lack of funds is already weighing on the agency's ability to continue with its activities, according to a copy of a message sent to representatives of the preparatory commission. The message on travel costs reminded member states about the "Secretariat's current financial situation" and called for "additional voluntary contributions from member states" to proceed with plans for filling director positions at the end of August.

The 2010 work programme, adopted at a January meeting in Abu Dhabi, for Irena to "initiate and implement the first advisory programmes and pilot projects starting with knowledge management and capacity building". Irena has spent the past 12 months hiring officials, establishing an office and spreading word about its existence. Ms Pelosse has said it would initially focus on providing policy advice to developing countries and would support new expert studies on the current extent of renewable energy and the cost of expanding it across the world.

The group helped to create a policy roadmap for the Pacific island state of Tonga to develop renewable energy to replace its heavy reliance on diesel to generate electricity. A gathering of member states in Sharm el Sheikh in late June last year chose to base the group's headquarters in Abu Dhabi over rival bids from Bonn in Germany and Vienna in Austria, and elected Ms Pelosse to lead the nascent agency. The vote came six months after the group was created at a meeting in Bonn.