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World Energy Outlook

Energy for all: financing access for the poor

"Energy for all: financing access for the poor", a special excerpt of World Energy Outlook 2011, focused on the critical issue of financing the delivery of universal modern energy access. The report estimates that, in 2009, $9.1 billion was invested globally in extending access to modern energy services and that, while giving modern energy to the world by 2030 is achievable, the annual investment to do so must be increased to more than  five-times existing levels and the extra spending must be matched by public-sector reforms.

The report concludes that five actions are essential to transforming the situation:

 

1. The adoption of a clear and consistent statement that modern energy access is a political priority and that policies and funding will be reoriented accordingly. National governments need to adopt a specific energy access target, allocate funds to its achievement and define their strategy for delivering it.

2. Mobilise additional investment in universal access, above the $14 billion per year assumed in our central scenario, the New Policies Scenario. All sources and forms of investment have their part to play, reflecting the varying risks and returns of particular solutions. All need to grow.

3. Private sector investment needs to grow the most, but significant barriers must first be overcome. National governments need to adopt strong governance and regulatory frameworks and invest in internal capacity building. The public sector, including multilateral and bilateral institutions, needs to use its tools to leverage greater private sector investment where the commercial case is marginal and encourage the development of replicable business models. When used, public subsidies must be well-targeted to reach the poorest.

4. Concentrate an important part of multilateral and bilateral direct funding on those difficult areas of access which do not initially offer an adequate commercial return. Provision of end-user finance is required to overcome the barrier of the initial capital cost of gaining access to modern energy services. Operating through local banks and microfinance arrangements can support the creation of local networks and the necessary capacity in energy sector activity.

5. Make provision for the collection of robust, regular and comprehensive data to quantify the outstanding challenge and monitor progress towards its elimination.

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