| Work Detail |
Only 10% of global investment in 2023 went to developing economies, excluding Brazil, China, and India, which attracted 43% of investments. This scenario makes the goal of reaching 11.2 TW of global renewable energy capacity by 2030, in line with the UAE Consensus target, challenging. By the end of 2024, the world had accumulated 4.5 TW of capacity, of which 1.8 TW was solar energy. Investment in renewable energy remains concentrated, according to a new report from the International Renewable Energy Agency (IRENA). Only 10% of global investment in 2023 went to developing economies, excluding large markets such as Brazil, China, and India. The lack of investment in emerging markets is mainly explained by the greater perception of risks in these economies, such as exchange rate volatility, macroeconomic instability, and political uncertainty. This outlook makes it difficult to achieve the goal of 11.2 TW of global renewable capacity by 2030, aligned with the UAE Consensus. By the end of 2024, the world had accumulated 4.5 TW of capacity, with 1.8 TW of solar capacity. Achieving this goal requires a cumulative investment of $31.5 trillion by the end of the decade, covering generation capacity, energy efficiency, conservation, grids, and flexibility. While 38 developed countries, representing 14% of the worlds population and 40% of global GDP, accounted for 47% of energy transition investments in 2023, only 10% reached developing economies, home to almost half of the worlds population (48%). Large emerging markets such as Brazil, China, and India, grouped together in the analysis, attracted 43% of investments, representing 28% of the global population and 27% of GDP. To balance the balance and address persistent gaps, Irena reinforces the need to increase financial flows to the Global South. It is also crucial to reform the way international support is provided to these countries, with governments and development partners strategically allocating resources to strengthen policy frameworks, clear regulations, and risk mitigation, thereby building a portfolio of bankable, transition-oriented projects. In the case of emerging countries, Irena highlights the need for integrated national energy planning to improve investment environments, with governments playing a key role in risk reduction. The agency cites blended finance structures as an example, where the public sector can provide small amounts of capital to mitigate risks that the private sector cannot yet assume. On the other hand, IRENA argues that international support should mobilize impact capital, especially in the form of low-cost concessional loans and grants that do not increase countries debt. Furthermore, to meet the global target, financing providers must support project developers who face difficulties in securing investment. The current strict eligibility criteria mostly favor large, well-structured, and low-risk projects, something uncommon in many developing countries. |
