China Dominates 2025 Energy Investments: IEA Highlights Global Disparities

Much of the global investment surge has been driven by China, which has more than doubled its clean energy investments to over $625 billion since 2015.

In the last decade alone, China’s contribution to global clean energy spending rose from a quarter to almost a third due to investments in solar, wind, hydropower, nuclear, batteries and electric vehicles.

At the same time, in 2024, China approved nearly 100 GW of new coal-fired plants, contributing to the highest global approvals for coal since 2015. This trend is likely driven by energy security concerns, which have become a major investment driver, particularly given China’s past experiences with blackouts, especially during peak summer demand and dry seasons impacting hydropower generation.

“China’s total energy investments equal United States and European Union combined. Ten years back, it was only equal to the US. China today is the number one investor in fossil fuels and clean energy infrastructure,” IEA Executive Director Fatih Birol said during the press briefing on June 5.

Africa, on the other hand, has seen a worrying decline in energy investments. Energy investments in Africa are expected to fall by a third in 2025 compared to 2015. This could be attributed to a decline in oil and gas spending, which has been only partially offset by higher investments in renewable power.

The continent accounts for only two per cent of clean energy investment despite supporting 20 per cent of the world population, the report highlighted.

Africa’s fossil fuel investments dropped from $125 billion in 2015 to $54 billion in 2025, while renewable energy investments saw a slight rise from $13 billion to $21 billion during the same period.

“Currency depreciation and higher interest rates have made it more difficult to access and service debt: in Africa, overall debt servicing costs are equivalent to over 85 per cent of total energy investment in 2025,” the report highlighted.

Indian scenario

Among emerging and developing countries, India and Brazil are notable for their energy investments, as highlighted in the report.

India has significantly increased its investments in renewable power, from $13 billion in 2015 to $37 billion in 2025. Over the same decade, its fossil fuel investments also rose, from $41 billion to $49 billion.

However, the country faces some roadblocks. India’s cost of capital for grid-scale renewable energy is 80 per cent higher than in advanced economies. This is despite the cost of capital being one of the lowest among its emerging market and developing economy counterparts.  When cost of capital is high, financing costs also rise, making it much more difficult to generate attractive risk-adjusted returns, especially for clean technologies that are capital-intensive.

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