SEforAll has done us all a big favor with its second annual review of the financial picture for achieving universal access to energy. Their new Energizing Finance is out and the news is not good.
Development Banks are meant to finance development, and the first step in development is a steady and reliable source of energy. While this may seem obvious, the report shows that international public finance declined by 1.7 billion USD since 2013-14. Clearly, this troubling drop-off demonstrates the need to remind the entire international public financial community of their essential role in providing energy access for all. A little targeted advocacy could go a long way here.
Leaving Africa Behind
Committed finance stands at only half of the 52 billion USD that is needed annually to achieve universal electricity access. Almost no money is going into Sub-Saharan Africa, less than one billion USD in annual commitments. These countries are home to more than 460 million people without access to electricity. Seven of the countries reviewed by SEforAll (Afghanistan, Angola, Ethiopia, Malawi, Mozambique, Nigeria and Sudan) reported a decline of more than 50% in electricity finance.
It’s Not Green, It’s Black
Where investment did occur it wasn’t in clean, renewable energy, it was in coal plants. In fact, between 2013 and 2016, investment in coal plants more than doubled. There is a reason why Father Christmas leaves naughty children coal in their shoes and stockings this time of year. The negative impacts on human health and climate change are tremendous. The poor and the planet deserve better.
The Smarter Solution
Off-grid solutions (OGS) are cheaper, faster, cleaner and easier to develop in rural areas. And private sector investors know it. They have doubled commitments to off grid solutions which is great, but still make up a scant 1.3% of energy investments in high impact countries. And very little of that is going to basic energy needs.
International public finance is key to unlocking access to clean energy for all. Like Cuba Gooding, Jr. told Tom Cruise in Jerry Maguire – show me the money. It’s time for Development Banks to rise and shine.
Download the full report here.