Energizing Finance: Understanding the Landscape 2019

Finance is key to achieving Sustainable Development Goal 7 (SDG7), which aims to ensure access to affordable, reliable, sustainable, and modern energy for all. However, less than one-fourth of the investment required for universal electricity access is taking place. The situation for clean cooking is even more concerning, where investment continues to lag even further behind. Without a concerted effort to increase the targeted flow of finance, it is likely that many governments’ energy access goals will not be met. 

The Energizing Finance series, developed by Sustainable Energy for All in partnership with Climate Policy Initiative, is the first and only in-depth attempt to capture multiple years of data on finance for the two key areas of energy access: electrification and clean cooking. This report focuses on public and private finance commitments in 20 developing countries – known as the HICs – that together are home to nearly 80 percent of those living without access to sustainable and modern energy.

This third report updates previous findings from 2013-14 and 2015-16 with energy access finance commitments from 2017.2 For the first time, policymakers and SDG financing leaders working to achieve universal energy access can view a five-year trend analysis of where finance is flowing for energy access and where it is not. This year, the report provides a deep-dive analysis of additional data on domestic finance and government expenditures in four countries: Uganda, the Philippines, Nigeria, and Nepal.

Key findings from the report include:

• Electricity access – USD 36 billion was committed to electricity access in the high-impact countries (HICs), up from USD 30 billion tracked in the last report. However, only USD 12.6 billion of total tracked finance commitments for electrification benefits residential customers, representing just one quarter of the estimated annual investment of USD 51 billon required to meet universal access.
• Sub-Saharan Africa – Except for Nigeria, finance commitments for electricity in Sub-Saharan African countries remain abysmally low. Four of the thirteen Sub-Saharan African HICs reported an absolute decline in electricity investment, and ten received less than USD 300 million each in 2017.
• Clean cooking – An annual investment of USD 4.4 billion is required to close access gaps, yet only USD 32 million in finance commitments for clean cooking solutions were tracked—representing less than 1 percent of the estimated finance required for universal clean cooking access by 2030.
• Fossil fuels – Despite a global climate emergency, the report highlights ongoing reliance of investment into fossil fuels as a way to support energy access. Finance commitments for grid-connected fossil fuel fired power plants, specifically coal, decreased from USD 8.1 billion tracked in last year’s report to USD 6.6 billion. Energizing Finance strongly underscores that coal will not reach vulnerable, remote populations and continued financing of new, non-renewable power is incompatible with the Paris Agreement, meeting the SDGs or responsible investing.