The finance required to close electricity and clean cooking access gaps remains “drastically short” of what is needed to meet global energy goals by 2030, international energy organisation Sustainable Energy for All states in its latest report.

Titled ‘Energizing Finance: Understanding the Landscape’, the report analyses finance flows for electricity and clean cooking access in countries across Africa and Asia with the most significant access gaps.

The report has found that $52-billion a year is needed to enable universal electrification, yet finance commitments for electricity in the 20 high-impact countries – which represent 76% of those without electricity access – have barely increased, averaging just $30.2-billion a year.

Sustainable Energy for All says that, for the second year in row, finance tracked for clean cooking revealed a confounding challenge: Finance committed across the 20 countries with the largest clean cooking access gaps – which represent 81% of the global population without access – actually decreased 5% to an average of $30-million, compared to the estimated yearly investment needed of at least $4.4-billion.

In Africa, nearly 600-million people live without energy access that allows them to improve their living standards. However, only 17% ($5-billion a year) of the total electricity finance tracked in the report was allocated to the region - down 32% from the last report.

Sustainable Energy for All CEO Rachel Kyte comments that although renewable energy solutions offer a powerful opportunity to provide reliable and affordable clean electricity investment, financing for coal-powered energy is increasing.

“…we are not yet seeing a strong enough project pipeline or sufficient levels of public investment that will crowd in private finance to seize this moment of falling prices for revolutionary technology. Even more worrying is that, simultaneously, we are seeing an incremental increase in funding for renewable energy, and investments in coal increasing. Coal is not an answer to energy poverty,” she notes.

In the countries tracked, yearly commitments for coal plants almost tripled, growing from $2.8-billion to $6.8-billion. “The potential impacts of this increase pose a clear challenge to climate goals, the air we all breathe and the ability to bring energy to those that need it, at the speed promised,” the organisation states.

OTHER FINDINGS

Other key findings from the Energizing Finance series include that off-grid solutions remain offtrack. Since the last report, finance tracked for off-grid technologies nearly doubled, going from $210-million to $380-million a year. However, this is only 1.3% of the total tracked flows into energy access.

Solar is soaring, with 54% ($16.2-billion yearly) of all finance committed in 2015/16 going to grid-connected renewable energy, with an almost fivefold increase in finance for solar photovoltaic.

Two-thirds of all electricity finance tracked was concentrated in South Asia - mainly in India. The top three countries – India, Philippines and Bangladesh – received an average of $24-billion a year, or 79.5%, of finance for electricity in the reporting period.

Moreover, investment heavily favoured non-residential customers, with only 28% ($8.6-billion) of all grid-connected electricity finance used to support new or improved access for residential consumers. The remainder is expanding electricity supply to support broader economic activity.

Given these findings, combined with the recent findings from the Intergovernmental Panel on Climate Changes’ Special Report on 1.5 Degrees, Sustainable Energy for All has called for a range of actions, including that international public financial institutions, notably development finance institutions, should fulfil their commitments to fill continuing financing gaps for electricity access, in accordance with commitments made by their government funders under the Paris Agreement.

“Additionally, policymakers should prioritise non-coal fired over fossil fuel power generation as part of their integrated energy planning and investment processes.

“Leaders, especially in sub-Saharan Africa where the shortfall in finance commitments for electricity access is starkest, should use the combination of policy, financial instruments and business model innovation required to achieve last mile access, among other approaches,” said Sustainable Energy for All.