Some of the smallest and most vulnerable island nations in the world will benefit from a new initiative aimed at increasing these countries’ access to renewable sources of energy.

This follows the signing in Cancun today of a memorandum of understanding between the Alliance of Small Island States (AOSIS), the Government of Denmark, the World Bank, and the United Nations Development Programme (UNDP).

The agreement recognizes the disproportionate harm of climate change for small island developing states and aims to support island countries to scale up their renewable energy efforts and shift to greater energy efficiency.

An 80 million Danish kroner ($US14.5 million) pledge of support from the Government of Denmark has helped kick off the initiative, which is expected to help island states from the Africa, Caribbean, and Pacific Islands regions transition to low-emission, climate-resilient development paths.

World Bank Group President Robert B. Zoellick jointly signed the agreement with Tillman Thomas, Prime Minister of Grenada and head of AOSIS; Lykke Friis, Denmark’s Minister for Climate and Energy; and Helen Clark, UNDP Administrator.  Zoellick said the initiative supports a group of nations that have been among the most active and most vocal at climate negotiations for many years.

“Small island developing states have been sounding the alarm about climate change for years now and have earned the title of ‘the conscience of the climate convention’,” Zoellick said. “They are leaders in taking actions on adaptation, and the World Bank Group has increased support to them for this purpose. This new initiative extends this support to clean energy, which will contribute to mitigation and also help reduce the islands states’ very high import bills for fuel.”

Because of their size and remoteness, most small island developing states are heavily dependent on imported petroleum for their energy needs.  Some countries spend an estimated 25 – 50 percent of their GDP on imported oil, which leads to very high domestic electricity costs.

“Reducing fossil fuel consumption is a ‘win-win’ for small island developing states”, said Helen Clark of the UNDP.  “It reduces the greenhouse gas emissions responsible for the rise in global temperatures, while at the same time improving energy security and freeing up national spending for investment in climate-resilient development.”

One of the expected benefits from this renewable energy initiative will be the freeing up of “fiscal space” for governments to spend on development and climate-resilient action.

“Climate change has the potential to derail all the good work that countries have undertaken for decades to overcome poverty and boost growth,” Zoellick said. “In countries with the possibilities of renewable energy sources, overall development is undermined if governments are spending so much on imported fossil fuels.”

The World Bank and the UNDP will facilitate the trust fund that will be established from the memorandum of understanding.