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Lack of investment in clean energies compromising the fight against climate change and poverty

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Lack of investment in clean energies compromising the fight against climate change and poverty

We are at a critical juncture in the energy-climate conversation

VIENNA, Austria, October 14, 2021 / APO Group / –

New research highlights a chronic lack of funding that will leave billions of people in sub-Saharan Africa and Asia without electricity or clean kitchens by 2030; Urgent action to accelerate investments in clean energy for developing countries is needed from world leaders meeting at COP26 to ensure a just energy transition.

This year’s Energizing Finance research series (https://bit.ly/3j1R4td) – developed by Sustainable Energy for All (SEforALL) in partnership with Climate Policy Initiative (CPI) and Dalberg Advisors – shows that the world is dangerously below the investment needed to achieve energy access for all by 2030 for the seventh year in a row.

In fact, the ongoing funding of electricity in the 20 countries that make up 80% of the world’s population without electricity – the high-impact countries – declined by 27% in 2019, the year before the start of the Covid pandemic. -19. The economic pressure caused by Covid-19 is expected to have resulted in even greater reductions in investments in energy access in 2020 and 2021.

Energizing Finance: Understanding the Landscape 2021 (https://bit.ly/3AFuTPE), one of two reports published as part of the series, finds that funding committed for residential electricity access has fallen to 12.9 billion USD in 2019 (compared to 16.1 billion USD in 2018) in the 20 countries. This is less than a third of the estimated $ 41 billion in annual investment needed globally to achieve universal access to electricity from 2019 to 2030.

Meanwhile, there is an abysmal amount of funding for a clean kitchen. Although polluting cooking fuels cause millions of premature deaths each year and are the second largest contributor to climate change after carbon dioxide, only $ 133.5 million in funding for clean cooking solutions was tracked in 2019. This is far from the estimated 4.5 billion USD per year. investment needed to achieve universal access to a clean kitchen (taking into account only the costs of clean stoves).

These findings were released just ahead of COP26 in Glasgow, where world leaders will focus on how to drive meaningful progress in tackling climate change. As part of this, they will have to think about how to reduce global emissions from the energy sector while increasing access to energy in developing countries to support their economic development.

“We are at a critical juncture in the energy-climate conversation,” said Damilola Ogunbiyi, CEO and Special Representative of the United Nations Secretary-General for Sustainable Energy for All and Co-Chair of UN-Energy. “What is clear is that the path to net zero can only be achieved with a fair and equitable energy transition that gives access to clean and affordable energy to the 759 million people who do not have access to electricity and 2.6 billion people who do not have access to clean cooking solutions. . It requires resources to mitigate climate change and create new opportunities to spur economic development and enable people to thrive everywhere. Energizing Finance provides an evidence base for current energy finance commitments and finance that countries need to meet SDG7 energy goals.

In 2018, 50% of total electricity funding went to grid-connected fossil fuels in high-impact countries, up from 25% in 2019. While this is a positive trend for the climate, investments in off-grid and mini-grid technologies were tracked. also decreased and accounted for only 0.9% of financing related to electricity.

Dr. Barbara Buchner, Global Managing Director of CPI, who partnered with SEforALL on Energizing Finance: Understanding the Landscape 2021, said: “Achieving both the Paris Agreement and universal access to energy requires much more investment in mini-grid solutions than what has been tracked in Energizing Finance. These solutions are essential in helping high-impact countries grow their economies without relying on fossil fuels. “

To better illuminate the challenges facing high-impact countries, the second publication in the series, Energizing Finance: Taking the Pulse 2021 (https://bit.ly/3aCaK2m), offers a detailed look at the estimated volume and type funding needed by businesses and customers to achieve universal energy access for electricity and clean cooking by 2030 in Mozambique, Ghana and Vietnam. Importantly, it illustrates the energy accessibility challenges people face in these countries and the need for financial support for consumers, such as subsidies.

The report finds that access to clean fuels and technologies, i.e. modern energy cooking solutions, in Ghana, Mozambique and Vietnam will cost a total of $ 37-48 billion by 2030 ; 70 percent of which will be used for fuels (eg LPG, ethanol and electricity). A more feasible scenario would be for all three countries to provide universal access to improved stoves at a total cost of $ 1.05 billion by 2030.

“Ghana, Mozambique and Vietnam each have unique challenges to overcome in achieving universal access to electricity and clean kitchens,” said Aly-Khan Jamal, partner at Dalberg Advisors, who partnered with to SEforALL on Energizing Finance: Taking the Pulse 2021. “This research digs deep into these national contexts to identify solutions that can make Sustainable Development Goal 7 a reality.

Providing results-based financing to energy project developers and exploring policies that facilitate support for demand-side subsidies and reduce taxes on solar home systems are among the policy recommendations presented for Ghana, Mozambique and the United States. Vietnam.

Energizing Finance also calls for increased innovation in financial instruments to achieve the scale of financing necessary for universal access to a clean kitchen; for the integration of strategies for access to electricity, access to cooking and climate change; and for national governments, bilateral donors, philanthropic organizations and DFIs to intensify their efforts to mobilize commercial capital to countries in sub-Saharan Africa.

Other key findings and recommendations from the reports are available here (https://bit.ly/3iX4eYn).

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