Scaling-up Clean Energy Investment in Developing Nations
This document discusses international financing for clean energy electrification in developing countries. It finds that foreign aid and private financing for electrification has increased from $15 billion in 1990 to over $60 billion in 2010. The top donors of electrification aid between 1990 and 2010 were Germany, Japan, the US, France and the UK. India and China received the most electrification aid and private financing. While aid has supported both renewable and non-renewable energy, private investments have overwhelmingly focused on non-renewable sources. The document examines factors that have driven the allocation of aid and private investments, and what is needed now to unlock more financing for green electrification projects in developing nations.
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Scaling-up Clean Energy Investment in Developing Nations
- 1. Ana Pueyo, IDS COP-21- Scaling-up investment in clean energy in developing countries 9th December 2015 Financing green electrification
- 2. 1 /17 There is a momentum for change
- 3. 2 /17 Who provides international finance for electrification? 0 15 30 45 60 75 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Billion Aid Private Aid and private finance for electrification (US$Billion) 1990–2010 Source: Aiddata and WB PPI
- 4. 3 /17 Who provides foreign aid for electrification? Top six donors: contributions to electrification 1990–2010 (US$Billion)
- 5. 4 /17 Who receives foreign finance for electrification? Electrification aid by recipient 1990–2010 Private finance by recipient 1990–2012
- 6. 5 /17 How much for renewables? Aid per generation source (US$ Billion) Private investment per generation source (US$b) 0 40 80 120 160 200 240 1990-1993 1994-1997 1998-2001 2002-2005 2006-2010 Billions Non-renewable Renewable Both 0 4 8 12 16 20 24 28 32 1990-1993 1994-1997 1998-2001 2002-2005 2006-2010 Billion Non-renewable Renewable N/A
- 7. 6 /17 Profitability Humanitarian Governance Governance Humanitarian Profitability PRIVATE SECTOR INTERNATIONAL AID • Large income per capita • High energy prices • Large energy resources • Good country governance • Power sector reform: unbundling and privatisation • Negative African bias • Good country governance • Initial stages of power sector reform • Fast economic growth What has driven the allocation of aid and private investment?
- 8. 7 /17 What is needed NOW to unlock finance for green electrification? : Green Growth Diagnostics for Africa Identification of the most binding constraints Political economy analysis GCEM Power Systems Reliability Analysis
- 9. 8 /17 What is holding back REinvestment in Ghana? High cost of finance Unattractiveinvestments compared to alternatives Low access to international finance Low access tolocal finance Lowdomestic savings Poorintermediation Returns toolow Risks too high Powersectorregulatory risk Creditworthinessofthe off-taker Macroeconomicrisk
- 10. 9 /17 Thank you A.Pueyo@ids.ac.uk Green Growth Diagnostics for Africa www.ids.ac.uk/project/green-growth-diagnostics-for-africa Pro-poor access to electricity www.ids.ac.uk/idsresearch/pro-poor-electricity-provision-programme