A new report has disclosed that finance required to close global energy access gaps remains dramatically short of what is needed to meet global energy goals by 2030,
The report by Sustainable Energy for All (SEforALL), titled Energizing Finance: Understanding the Landscape 2018, analyses finance flows for electricity and clean cooking access in countries across Africa and Asia with the most significant access gaps.
The report reveals alarming developments in several key areas of energy access finance that require urgent action to keep Sustainable Development Goal 7 – affordable, reliable, sustainable and modern energy for all – within reach.
“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, CEO and special representative of the UN Secretary-General for SEforAll.
“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 an incremental increase in funding for renewable energy, investments in coal increased. Coal is not an answer to energy poverty,” Kyte added.
Research shows an annual investment of $52 billion is needed to meet universal electrification, yet finance commitments for electricity in the 20 ‘high-impact’ countries – representing 76 per cent of those without electricity access – have barely increased, averaging just $30.2 billion annually.
For the second year in a row, finance tracked for clean cooking revealed a deeply confronting challenge: finance committed across the 20 countries with the largest clean cooking access gaps representing 81 per cent of the global population without access actually decreased 5 per cent to an average of just $30 million, compared to the estimated annual investment needed of at least $4.4 billion.
Of serious concern, finance for coal-powered energy is increasing, at a time when the International Panel on Climate Change is issuing stark warnings about stalling progress on the Paris Agreement targets.
In the countries tracked, annual commitments for coal plants almost tripled, growing from $2.8 billion to $6.8 billion.
The potential impacts of this increase pose a clear challenge to climate goals, the report noted, such as the air we all breathe and the ability to bring energy to those that need it, at the speed promised.
The Energizing Finance research, conducted in partnership with Climate Policy Initiative, enables financial institutions and policy-makers to develop and implement strategies that can be scaled and refined to reach more people, more affordably, with clean and sustainable energy.
Dr Barbara Buchner, executive director, Climate Policy Initiative, said: “Our numbers paint a stark picture. We are falling further and further behind goals for energy access investment. Regions with the highest needs, like sub-Saharan Africa, are getting the smallest share, while we’re seeing big gaps for some of the technologies with the most promise, like off-grid renewable energy and clean cooking. This should be a wake-up call to policymakers and investors who are working to ensure universal and sustainable energy.”