Developing countries face severe under-investment for clean energy finance
The amount of finance available for developing countries to adopt clean cooking technologies and renewable energy is severely lacking, a report has found.
Research from Sustainable Energy for All (SEforALL) shows that the lack of funding in many of the 20 high-impact countries across Africa and Asia has reached “acute levels”.
Furthermore, it found that huge amounts of planned investment and funding support continue to be delayed or face multiple barriers which limit their impact and deprive vulnerable populations of energy access.
An estimated annual investment of $41bn is needed to achieve universal residential electrification, but only one-third of this (just $16bn has been committed) was tracked by SEforAll.
In particular, finance commitments for renewable-energy-based mini-grids and off-grid energy systems remain far short of necessary levels, attracting less than 1-1.5 per cent of the total finance for electricity tracked, the body said.
Finance for clean cooking to replace harmful energy sources tripled from $48m in 2017 to $131m in 2018. But despite the growth, this still remains just a fraction of the estimated annual $4.5bn required to achieve universal clean cooking access by 2030.
SEforALL also found a significant increase in fossil-fuel finance commitments in 2018, accounting for the largest portion of electricity finance flows for the first time in at least six years.
“This risks locking countries into decades of high carbon emissions, import dependency and depreciating or stranded assets, posing fiscal, economic and environmental risks for developing countries,” it said.
In contrast, data shows that finance for grid-connected renewables during the same period declined for the first time since 2013.
“As we deal with the ongoing challenges of Covid-19, and the ever growing impacts of climate change, the need for modern, sustainable energy access has never been more important,” said Damilola Ogunbiyi, SEforALL CEO.
“The little finance that is committed is not being disbursed fast enough, stalling energy access projects that will improve people’s lives and grow economies
“More worryingly, ahead of a pivotal COP26, fossil-fuel commitments have increased, risking profound climate impacts.
“Countries must seize this moment to recover better from Covid-19 and move away from the energy systems of the past and invest in the renewable energy systems of the future to accelerate access and underpin economic growth. We need sustainable energy for all, and we need it now.”
Today, an estimated 789 million people still live without affordable, reliable electricity sources, mainly in Africa and Asia, while about 2.8 billion use dirty cooking methods.
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