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Energy is at the heart of development. Energy makes possible the investments, innovations, and new industries that drive jobs, inclusive growth, and shared prosperity on a more livable planet.

Yet 685 million people still live without electricity worldwide, and about 2.1 billion people rely on polluting traditional fuels and technologies to cook their meals.

Scaling up renewables and energy efficiency, and investing in electrification at scale, while phasing-down fossil fuels, is critical for providing clean energy.

Energy Shocks Hit the Poor the Hardest

Global shocks such as the COVID-19 pandemic, the war on Ukraine, and conflict in the Middle East have further slowed progress toward achieving universal access to affordable, reliable, sustainable, and modern energy by 2030 (Sustainable Development Goal (SDG) 7). Developing countries have faced the highest burdens as they have limited capacity to mitigate energy price volatility, leading to energy rationing in some countries and escalating poverty.

Renewables are Key to Green, Secure, Affordable Energy

Renewable energy can help countries mitigate climate change, build resilience to volatile prices, and lower energy costs. Solar and wind technologies are a game changer as solar and wind are abundant in many developing countries, cost-competitive, and a source of reliable power when combined with storage. Hydropower also provides clean, renewable energy, one of the lowest-cost sources of electricity for consumers. 

Solar mini-grids can provide high-quality, uninterrupted electricity to nearly half a billion people in underserved communities and be a least-cost solution to close the energy access gap by 2030.

Financing the Energy Transition

Energy consumption accounts for more than three-quarters of greenhouse gas emissions. Accelerating the energy transition requires financing the massive deployment of renewable energy and energy efficiency while gradually retiring fossil fuels.

To achieve energy transition and access for all, investments in developing countries must grow sevenfold to $1-2 trillion annually by 2030. Two-thirds of these investments will come from the private sector. For investors to come in, countries must strengthen power utilities that can transmit and distribute new renewable power and develop robust regulations and institutions to oversee the development of clean energy projects.

However, in developing countries, constrained fiscal space and lack of access to finance make costly upfront investments in energy efficiency and renewable energy out of reach. In addition, macroeconomic and political uncertainties discourage private-sector investors from supporting energy efficiency and renewable energy.

Last Updated: Jun 13, 2024

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