Developing countries have financing problem in renewable energy field

The growth in renewable energy is mainly concentrated in China, the US and the EU, and finance is a major obstacle for developing countries, said Gauri Singh, Deputy Director General of IRENA (International Renewable Energy Agency), during her speech at the Baku Energy Forum, APA-Economics reports.

Gauri Singh said that 570 gigawatts of renewable energy capacity was put into operation globally in 2023. However, if we exclude China, the EU and the US, only 17 gigawatts of growth was recorded in the rest of the world. This is an indicator of great inequality.

According to an IRENA official, the main obstacle to developing countries’ progress in this area is limited financial resources: “Although progress was discussed on the issue of finance at COP29, there is still much to be done. It is not only the amount of finance allocated, but also the cost of capital is the main problem. Compared to developed countries, access to capital is much more expensive for developing countries.”

Singh added that for these countries, not only energy generation, but also the development of transmission infrastructure – that is, energy networks – should not be postponed: “The implementation of grid projects planned today usually takes 5-7 years. If we accelerate investments in renewable energy, then grid capacities must also be expanded in parallel, otherwise there will be a serious mismatch between energy generation and actual consumption locations”.

She also stressed that while there has been progress in electricity generation on a global scale, serious work still needs to be done in the areas of electrification of transport, decarbonization of industry, and electrification of heating and cooling systems: “The real challenges are in these areas and I think we will have to talk about these topics for a long time to come.”

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