9 December 2020
SEforALL Reports Warn of Funding Gap Jeopardizing Achievement of SDG 7
UN Photo/Mark Garten
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The reports review 2018 financial flows to the countries with lowest energy access for electricity and clean cooking, and identify gaps between commitments and disbursements of energy development finance.

Without significant increases in committed investments better targeted to countries and projects most in need, as well as improvements in disbursement delays, the reports warn that the world will not succeed in achieving SDG 7.

Sustainable Energy for All (SEforALL) has released two reports as part of its Energizing Finance series, which track 2018 finance for electricity and clean cooking in the countries with lowest energy access, and identify gaps between commitments and disbursements of development finance for energy. The reports find it will not be possible to achieve SDG 7 (affordable and clean energy) by 2030 without significant increases in committed investment and improvements in investment disbursement delays.

SEforALL partnered with the Climate Policy Initiative to publish the report titled, ‘Understanding the Landscape 2020,’ which tracks finance for electricity and clean cooking committed in 2018 to 20 “high impact countries” (HICs) in sub-Saharan Africa and Asia, home to over 80% of the world’s population without energy access. The fourth edition of this annual report finds that 789 million people lack access to electricity, and 2.8 billion people lack access to clean cooking. In 2018, only one-third of the annual USD 41 billion investment required to achieve universal residential electrification and less than 1% of the annual USD 4.5 billion required to achieve universal clean cooking access by 2030 were tracked in the HICs. Additionally, the report notes, investments are not flowing to the countries with the greatest need, nor are energy access investments channeled to the right energy solutions. Investment in fossil fuel-generated electricity increased in 2018, with fossil fuels accounting for the largest portion of electricity finance commitments to HICs for the first time in six years. Overall, the energy access investment portfolio continued to be dominated by a small number of large projects, and capital providers and private sector investments remained elusive in the clean cooking sector. The report concludes with recommendations for policies, regulatory frameworks, institutions, instruments, and business models to accelerate efforts.

SEforALL’s second report titled, ‘Missing the Mark 2020,’ identifies the gaps between commitments and disbursements of development finance for energy, as tracked in the Organisation for Economic Co-operation and Development (OECD) Creditor Reporting System database between 2013-2018. The report finds that although disbursements for energy in HICs have increased at a faster pace than overall development finance disbursements, energy finance disbursements lagged significantly behind commitments of USD 52 billion. Furthermore, aggregate disbursements during the period reviewed of USD 32 billion were insufficient to cover even one year of the annual investment of USD 45 billion necessary to achieve SDG 7 energy access targets. While delays in disbursement have declined since 2002, the report finds delays remained substantial due to cumbersome administrative processes, a lack of capacity among donors and implementing entities, and design flaws that hindered project execution. The report provides recommendations for donors, development finance institutions, and national policymakers to accelerate disbursements and improve the efficacy of energy projects in HICs. [Publication: Energizing Finance 2020: Understanding the Landscape] [Publication: Energizing Finance 2020: Missing the Mark] [SEforALL Press Release on Energizing Finance 2020] [SEforALL Press Release on Understanding the Landscape] [SEforALL Press Release on Missing the Mark]

By Gabriel Gordon-Harper, Thematic Expert on Climate Change and Sustainable Energy

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