Electrification targets in developing countries struggling due to global underfunding
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An estimated 1.1 billion people around the world still lack access to electricity and the money needed to connect them isn’t rising fast enough to meet a 2030 goal according to a report from Sustainable Energy for All (SEforALL).
The ‘Energizing Finance: Understanding the Landscape 2018’ report analyses finance flows for electricity and clean cooking access in countries across Africa and Asia with the most significant access gaps.
An annual investment of $52bn (£40bn) is needed to meet universal electrification research suggests, yet finance commitments for electricity in the 20 ‘high-impact’ countries - representing 76 per cent of those without electricity access - has barely increased, averaging just $30.2bn annually.
Meanwhile, funding to expand cleaner, more energy-efficient cooking has declined, said SEforALL in a report that compared financing levels in 2015 and 2016 with the preceding two-year period.
More than a quarter of the annual investment in 2015 and 2016 - $8bn per year - was for grid-connected fossil fuel plants, double the spending on them in 2013-14 and something “the global community may be concerned to note”, it added.
China provided a fifth of that fossil-fuel expansion money, despite its ramping investment in renewable energy generation domestically.
“The good news is that renewables offer us a powerful opportunity to provide reliable and affordable clean electricity both through the grid and off-grid”, said, Rachel Kyte, SEforALL CEO.
“The bad news is that we are not yet seeing a strong enough project pipeline or sufficient levels of public investment that will crowd in private finance to seize this moment of falling prices for revolutionary technology. Even more worrying is that at the same time we’re seeing incremental increase in funding for renewable energy, investments in coal increased. Coal is not an answer to energy poverty.”
She added that the funding uptick for electric power was “nowhere near sufficient for us to reach the goal, or to meet the needs, or to make these communities resilient in the face of climate change impacts”.
In seven developing countries, including Nigeria, Malawi, Sudan and Afghanistan, investment in electrification dropped by 50 per cent or more in 2015-2016 compared to 2013-14, with sub-Saharan Africa as a whole receiving less money.
India, the Philippines, Bangladesh and Kenya garnered 86 per cent of investment in 2015-2016 for expansion of electricity access among the 20 countries studied.
Within that, the same four received the most money for new coal-fired power plants, which often do not help the poorest where they are not connected to the power grid, the report said.
The study looked at both international and domestic sources of funding, averaged over two years.