Innovative financing is needed to mobilise clean energy capital in developing countries. What could it look like?
Sep 10, 2024
auto_awesome
Investing in clean energy for developing countries is crucial yet currently underfunded, with less than 1% of global investments directed there. Innovative financing mechanisms are essential, including public-private partnerships and local currency investments. The podcast also emphasizes Nigeria's challenging transition from oil dependence to net-zero emissions by 2060. By exploring successful projects in countries like Kenya and Barbados, it highlights the need for localized approaches and collaboration to improve energy access and overall quality of life.
43:24
AI Summary
Highlights
AI Chapters
Episode notes
auto_awesome
Podcast summary created with Snipd AI
Quick takeaways
Innovative financing solutions are crucial for reducing perceived risks in emerging markets, enabling inclusive energy transitions in developing countries.
Infrastructure development and decentralized energy solutions must be prioritized to address the unique energy access challenges faced by local communities.
Deep dives
Collaborative Energy Transition
The Energy Disruptors Unite Summit, scheduled for October 1st and 2nd in Calgary, aims to promote collaboration for accelerating the energy transition. With 3,000 global participants and over 100 influential speakers, including notable political leaders like Jacinda Arden, the summit seeks to create a platform for innovative discussions. The focus will be on building partnerships that can redefine energy systems and engage various stakeholders in meaningful dialogue. Attendees are encouraged to explore new ideas and leave the event feeling empowered to drive change in the energy landscape.
Investment in Clean Energy Access
Damalola Agunbayi, CEO of Sustainability for All, emphasizes the urgent need for substantial capital investments to facilitate energy access in developing countries. Currently, 675 million people lack access to electricity, which hinders both economic development and quality of life. Agunbayi advocates for innovative financing solutions to reduce the perceived risks in emerging markets and ensure that energy transitions are inclusive and sustainable from the outset. The call for trillions in investments underscores the importance of establishing reliable, affordable, and sustainable energy sources as a foundation for growth.
Rethinking Risk Assessment in Developing Economies
The podcast highlights the flaws in current risk assessment methods for financing clean energy projects in developing countries. Agunbayi explains that prevalent perceptions of high risks often deter investments and overlook successful projects in both developed and developing nations. Additionally, the necessity for financing in local currency is stressed, as many projects fail solely due to foreign currency issues rather than their viability. By addressing these misconceptions and adapting financing models, stakeholders can improve access to clean energy while promoting local economic growth.
The Integral Role of Infrastructure and Innovation
Infrastructure development is essential for successful energy transitions, particularly as new technologies emerge to meet energy needs. The addition of decentralized energy solutions presents opportunities in regions lacking established infrastructure, allowing fresh and clean energy systems to be implemented from the ground up. Nevertheless, a thorough analysis of local demands and conditions is vital to determine optimum energy models tailored to specific environments. By emphasizing the need for data-driven approaches, the discussion encourages innovation in both energy technology and financing to ensure sustainable development across various regions.
Less than 1% of clean energy investments goes to developing countries. Guarantees and partnerships could increase this.
The global energy transition effort is all about ‘the new’. New technology, new financing models, new ways of looking at energy systems. The need for ‘the new’ is greatest in developing countries. For many of them, the challenge isn’t just transitioning to clean energy, it’s providing energy access in the first place. By 2030, we could see nearly a billion people left without access to energy, never mind clean energy. So how can we get the investment flowing to where it’s desperately needed?
Damilola Ogunbiyi is CEO of the organisation Sustainability For All. SE4All works with public and private sector to provide access to reliable, affordable, sustainable and new energy for all by 2030. We sit down with Damilola to discuss her holistic view of the energy transition, the innovative financing models needed to mobilise capital, carbon markets, and how the industry should address the challenge of improving energy access while transitioning to clean sources.
Energy access is directly linked to quality of life. This is especially true as the climate crisis worsens. Both public and private sectors need to work together to mobilise capital for the energy transition. So how can we do it?
To keep up to date with everything we talk about on the show, sign up for our weekly Inside Track newsletter. You’ll get extra analysis from Wood Mackenzie and be notified when a new episode of the podcast is out.
The Interchange Recharged is brought to you by Anza Renewables. Are you wasting valuable time tracking down solar module information that quickly goes stale? Anza’s revolutionary platform can help with up-to-date pricing, technical, risk, and domestic content data from 110 solar modules. Compare products in minutes and redirect your time to higher value work. Find out more