UNCTAD Least Developed Countries Report Highlights Energy Poverty
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The UNCTAD Least Developed Countries Report 2017 focuses on the role of energy access in LDC development.

The publication analyzes the two-way relationship between between economic development and the productive use of energy.

It also assesses LDC energy finance, noting that current investment is inadequate to achieve universal energy access by 2030.

22 November 2017: The Least Developed Countries Report 2017, published by the UN Conference on Trade and Development (UNCTAD), highlights the central role of improving energy access in promoting development in least developed countries (LDCs), and analyzes the financial and technological means to enhance energy access.

The report finds that LDCs are not achieving a rate of electrification necessary attain Sustainable Development Goal (SDG) 7 (ensuring access to affordable, reliable, sustainable and modern energy for all). The study shows that realizing universal access to energy by 2030 will require a 350% increase of the annual rate of electrification in LDCs, noting that 60% of people living in LDCs currently lack access to energy. This number is substantially higher than the average of 10% in other developing countries. Additionally, the analysis finds that the per capita capacity to generate electricity of all LDCs combined represents only 8% of the capacity of other developing countries, and 2% that of richer nations.

Beyond the welfare implications of satisfying the basic energy needs of households, the report reviews the manner by which modern energy provision can result in productivity increases across the economy. Economic growth requires increased energy inputs resulting in a higher demand for energy, particularly in low- and middle-income countries. The publication labels this two-way relationship between economic development and the productive use of energy the “energy-transformation nexus.” For example, in LDCs, 40% of businesses suffer from reduced productivity due to inadequate, unreliable and unaffordable electricity.

Current international investment in the energy sector in Least Developed Countries is inadequate to achieve universal energy access by 2030.

The report estimates that achieving universal energy access by 2030 in LDCs requires US$12 billion to US$40 billion per year, noting that current investments are insufficient to achieve this objective. Total official development assistance (ODA) to the energy sector in LDCs currently accounts for US$3 billion per year. Private investors have shown little interest due to the sector’s high upfront costs and slow payback periods, as well as the perception of LDCs as high risk environments. To increase investment, the report recommends that international donor governments honor their aid commitments, and that LDC governments develop domestic debt markets, and leverage impact investors, infrastructure funds and their populations living abroad to attract private investment.

The report also addresses the requirements to achieve energy transformation, noting that LDCs will require an increase in utility-scale renewable technologies, hydroelectric power, and natural gas-powered electric generation. The publication recommends that the international community assist LDCs in gaining access to appropriate technologies, and that LDC governments implement appropriate national policies to strengthen the capacity of their energy sectors to absorb the technologies. [UNCTAD Press Release] [The Least Developed Countries Report 2017]

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