follow a new one UNCTAD reportdeveloping countries actually face a staggering $4 trillion gap in sustainable development investment.
UNCTAD Secretary-General Rebeca Grynspan says a “significant increase” in material support for renewables in developing countries is “critical” for the world to meet its climate goals by 2020. 2030.
Poorer countries are left behind
While investing in renewable energy has almost tripled since the adoption of the Paris Agreement Nearly eight years ago, poorer countries were largely abandoned.
Grynspan said more than 30 developing countries have not registered an international investment in utility-scale renewable energy production since the landmark climate change treaty was adopted in 2016. 2015.
According to UNCTAD, the amount of foreign direct investment in clean energy that developing countries will attract by 2022 is 544 billion USD – much lower than demand.
Slowing down in SDG finance
The good news from the report is that energy companies among the top 100 multinationals have been increasingly moving towards renewable energy and divest fossil fuel assets at a rate of about $15 billion per year.
However, the report also found that the pace of investment in renewable energy is generally slower in 2022, “due to a decline in international project financing arrangements”.
UNCTAD says that in developing countries, the biggest gap in investments related to the Sustainable Development Goals (SDGs) is in energy, water and transport infrastructure.
Challenges for foreign direct investment
According to UNCTAD, foreign direct investment (FDI) is also on the decline. global flows down 22 percent by 2022, to $1.3 trillion. IN Least Developed Countriesmost of which is in Africa, FDI inflows have fallen by 16%.
The UNCTAD report says the slowdown is driven by “overlapping crises”: the war in Ukraine, high food and energy prices and debt pressure.
With these factors still at play in 2023, the agency said it expected “reducing pressure on global FDI” to continue this year.
New ‘lightweight’ for investment
The report calls for a range of policies and financial mechanisms to help developing countries attract the investments they need.
UNCTAD highlights the importance of debt forgiveness for developing economies, to give them the financial space they need for clean energy spending and to help lower country risk ratings, a condition prerequisite for attracting private investment.
The agency also recommends reducing capital costs for clean energy investments through partnerships between international investors, the public sector, and multilateral financial institutions – a measure that could reduce up to 40 % difference in borrowing costs for energy investment projects in developing countries. .
‘The only show in town’
Ms. Grynspan affirmed that investment plays a “huge role” in achieving the SDGs.
She said they were simply “too big to fail”, calling them “the only game in town” that required collective action and global solidarity.
