The Finance for Just and Green Energy Transition (FJGET) is a visionary initiative dedicated to mobilizing and channeling large-scale capital to Just and Green Energy Transition in Latin America and the Caribbean (LAC). FJGET strives to create a thriving environment for investments that align economic development with net-zero carbon targets and social justice parameters, paving the way for a sustainable and equitable future.
About FJGET
The FJGET (Finance for Just and Green Energy Transition) initiative is a collaborative effort led by organized civil society, multilateral and national development banks, and the United Nations. It is led by the Blend Institute, Instituto Clima e Sociedade (ICS), and CAF. The initiative was created by a task force integrated by MDBs and national banks (World Bank Group, IFC, Cooperacion Andina de Fomento, JICA, BNDES), UN entities (UNCDF, UNDP), civil society organizations (Blend, ICS), academia (IE University), the Brazilian government (Ministry of Industry, Ministry of Finance, Ministry of Planning, State of Pernambuco Government), the Spanish government, and the G20. Its primary goal is to mobilize and direct large-scale capital towards promoting a just and green energy transition in Latin America and the Caribbean (LAC). Recognizing the region’s comparative advantage in renewable resources, FJGET aims to create an enabling environment for sustainable investments that support both economic growth and climate goals.
FJGET’s work is structured around two complementary tracks. The first track focuses on building a solid technical and conceptual foundation. This includes developing investment guidelines, criteria for project selection, a conceptual framework for the powershoring strategy, and a project accreditation structure. These efforts ensure that investments meet sustainability and social justice criteria, fostering a broad and lasting positive impact in the region.
The second track concentrates on creating a LAB, an investment environment dedicated to identifying and proposing enabling factors such as financial architecture, regulation, and de-risking. FJGET also promotes joint assessment of investment opportunities and the formulation of co-investment agreements. This approach facilitates the efficient mobilization and allocation of financial resources, accelerating the transition to a green and just economy in LAC.
Context, Challenges, and Opportunities
The global challenge of mobilizing and allocating capital at the necessary pace and scale to drive decarbonization and sustainability projects is immense. According to IRENA, global investment in energy transition technologies reached a record USD 1.3 trillion in 2022. However, to meet the 1.5°C target of the Paris Agreement, annual investments need to quadruple. Despite progress, the scale and pace of implementations remain insufficient, with investments concentrated in a few countries and regions, leaving many areas with significant potential underfunded and unable to develop their energy transition infrastructure adequately.
Particularly in Latin America and the Caribbean (LAC), the opportunities for sustainable development are vast, yet they face significant barriers to scaling. The region boasts a significant comparative advantage in renewable resources and essential raw materials for the climate transition. However, the absence of a structured framework for “Just” and “Green” investments, encompassing financial architecture, regulation, and de-risking, hampers the attraction of necessary capital at a large scale and accelerated pace.
In this context, the concept of powershoring—a strategy to relocate energy-intensive industrial plants to regions with comparative advantages in renewable resources—emerges as a robust solution. This approach not only promotes the decarbonization of production chains but also reduces operational costs and enhances energy security. Nevertheless, significant challenges exist, such as an insufficiently defined conceptual framework, lack of a uniform investment taxonomy, and regulatory barriers. FJGET aims to address these challenges by creating a structured environment with institutional stability and legal certainty, establishing a consistent conceptual framework, and proposing financial architecture and de-risking mechanisms to foster co-investment agreements among diverse capital providers. Through this integrated approach, FJGET seeks to catalyze significant investments, accelerating the green and just energy transition in Latin America.