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Bringing down the cost of capital is key to unlocking clean energy growth in emerging economies

By District Energy posted 02-14-2024 08:45




Clean energy investment in emerging and developing economies outside China needs to rise more than sixfold in next 10 years, but securing affordable financing is a major hurdle.

Many emerging and developing economies are missing out on the wave of global clean energy investment as the high cost of capital for new projects is deterring developers and stifling opportunities in the new energy economy, particularly for some of the world’s poorest countries, a new IEA report finds.
Global clean energy investment has risen by 40% since 2020, reaching an estimated USD 1.8 trillion in 2023, but almost all the recent growth has been in advanced economies and in China. By contrast, other emerging and developing economies account for less than 15% of total investment, despite being home to 65% of the world’s population and generating about a third of global gross domestic product. Capital flows to clean energy projects in many emerging and developing economies remain worryingly low.