Shortchanging energy access : a progress report on multilateral development bank finance

Oct 19, 2018

Source/author : Oil Change International (OCI)

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About one billion of the world’s population lack access to electricity and its associated development benefits.Nearly three billion people still rely on solid fuels such as wood and charcoal for cooking and heating. One-half of those without electricity and one-third of those without clean cooking reside in sub-Saharan Africa.

Continuing business-as-usual means an estimated 674 million people globally will lack access to electricity in 2030, ninety percent of whom will reside in remote rural areas. 90 percent of those 674 million people will live in sub-Saharan Africa.
Current approaches vastly underinvest in the solutions that are best suited for rural areas. Globally, an average of USD 36 billion per year needs to flow to off-grid and mini-grid solutions – the vast majority of which would be in the form of renewable energy technologies – to achieve universal electricity access by 2030.

The multilateral development banks (MDBs) are equipped with billions of dollars of government-backed support to solve poverty and development challenges. This report uses a transactionby-transaction database compiled from information provided by MDBs in public documentation to assess the 2014 through 2017 contributions of four MDBsa – the African Development Bank (AfDB), the Asian Development Bank (ADB), the Inter-American Development Bank (IDB), and the World Bank Group (WBG) – to the United Nations Sustainable Development Goal 7 (SDG 7) of “access to affordable, reliable, sustainable and modern energy for all” by 2030.


The MDBs are not channeling enough of their energy finance to access for the poor. Less than 20 percent of MDB energy financeb from 2014 through 2017 supported energy access for the poor. Collectively, the MDBs approved an average of USD 3.6 billion per year for projects aimed at advancing energy access primarily for poor and/or rural communities;

Only 2 percent of energy finance went to off-grid and decentralized energy solutions that are most likely to close the access gap in rural areas. MDBs spent an average of USD 378 million per year on off-grid and distributed energy for access, which represents less than 2 percent of the USD 36 billion of total annual investment needed to properly finance off-grid and mini-grid solutions;

Just 1.6 percent of MDB energy finance went to clean cooking solutions, a major under-investment. MDBs approved an annual average of USD 312 million for clean cooking and heating solutions, compared to the USD 4.4 billion in yearly investment needed.

Only 12 percent of MDB support for the “enabling environment” had components to advance energy access for the poor. Policy support, technical assistance, and capacity building are critical in order to channel more finance to energy access solutions, and this analysis shows they are being drastically under-invested;

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