The nexus between energy access and finance is still off track
Finance is one of the biggest challenges to achieving Sustainable Development Goal 7 – access to affordable, reliable, sustainable and modern energy for all – by 2030.
That is why Sustainable Energy for All (SEforALL) has developed the Energizing Finance research series, which is a pioneering effort to systematically analyze finance flows for electricity and clean cooking access in the 20 high-impact countries that represent about 80% of the global access deficit. There are currently just under one billion people without access to electricity and three billion people who lack access to clean cooking. These issues must be urgently addressed if we are to leave no one behind.
This year’s report, Energizing Finance: Understanding the landscape 2018, will be released on November 12 in Dakar, Senegal in connection with the ECOWAS Sustainable Energy Forum (ESEF).
Launching the report in Africa at the ECOWAS Center for Renewable Energy and Energy Efficiency (ECREEE) provides a great opportunity to engage African leaders from the policy, business and civil society sectors to discuss the challenges and opportunities to increasing investments, especially in Africa, which has not attracted the levels of financial commitments that are needed.
The first edition of the Energizing Finance series, released last year at the UN General Assembly, estimated that an annual investment of less than $20 billion was tracked in the 20 high-impact countries, less than half the estimated amount needed to meet universal electrification in them.
This year’s report will show that there has been some progress, but the bulk of investments have gone to only four countries, three of them in Asia. In total, financial commitments still fall far short of what is needed to meet SDG7 by 2030.
The next two years will be crucial. We need to get our financial priorities right and get them in place urgently since it will likely take another decade for their impact to gain traction.
Development finance, for example, has a critical role to play in opening up new hard-to-reach markets for investments by the private sector. But data from the report shows that development finance continues to focus too much on traditional energy projects.
The report’s research, produced in partnership with the Climate Policy Initiative, seeks to engage government leaders and public and private finance decision makers by providing guidance to refine and improve strategies to accelerate progress in delivering electricity and clean cooking solutions in an affordable and sustainable manner.
Yet we must ensure that leaders should not only focus on financial commitments for electrification but also for clean cooking, which perhaps represents the biggest challenge in overcoming the access gap. Millions of people, mainly women and children and most of them in Africa, die each year from indoor pollution caused by burning charcoal, wood and other biomass fuels for cooking.
By analyzing investment flows, policymakers and donors can acquire a better understanding of where to target funds to achieve universal clean energy access goals in the most effective manner, while identifying areas when financing is most needed. Only when we fix the direction of financial flows can we ensure access to affordable, reliable, sustainable and modern energy for all.