In October Sustainable Energy for All (SEForAll) released their 2019 Energizing Finance Report, a two-part report series that shines a light on financial investments in the electricity sector between 2015-2017. Overall, the report showed that while the sector is experiencing all-time high investments, commitments are still well below what’s needed to achieve universal energy access by 2030, UN Sustainable Development Goal 7 (SDG7).
While investments of $51 billion annually are required to meet SDG7, funding commitments in 2017 peaked at just $36 billion. The report provides essential insights into how national contexts shape finance flows for electricity and clean cooking access when individual countries have their own unique set of energy needs, policies, regulations and infrastructures.
According to the International Renewable Energy Agency (IRENA), 40% of future electricity connections will be through mini-grids. However, the Energizing Finance 2019 report showed current funding for mini-grids is severely lacking, achieving only 1.2% ($430 million) of 2017 commitments. Off-grid energy appears to be the next big investment opportunity, with the report showing that investors and foundations have more than doubled their off-grid investments from $18 million in 2016 to $42 million in 2017. Diverse solutions and market development activities that include off-grid solutions, grid-connected renewables, and other strategies that can be mobilized and allocated at scale are essential to achieving SDG7.
So, what can be done? Fortunately, the report offers several actions to meet SDG 7 goals. Mini grids, stand-alone solar and improved cookstoves must become mainstream in national electricity access strategies and planning. Stakeholders will also have to implement dedicated regulations and financial support mechanisms to support growth. Once a service area is connected to the centralized grid and a cookstove policy is in place, communities have to be educated about the future of mini-grids and the benefits of cookstoves.