This document discusses international financing for clean energy electrification in developing countries. It finds that foreign aid and private financing for electrification has increased from $15 billion in 1990 to over $60 billion in 2010. The top donors of electrification aid between 1990 and 2010 were Germany, Japan, the US, France and the UK. India and China received the most electrification aid and private financing. While aid has supported both renewable and non-renewable energy, private investments have overwhelmingly focused on non-renewable sources. The document examines factors that have driven the allocation of aid and private investments, and what is needed now to unlock more financing for green electrification projects in developing nations.

1. Ana Pueyo, IDS
COP-21- Scaling-up investment in clean energy in developing countries
9th December 2015
Financing green electrification

2. 1 /17
There is a momentum for change

3. 2 /17
Who provides international finance for electrification?
0
15
30
45
60
75 1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Billion
Aid Private
Aid and private finance for electrification (US$Billion) 1990–2010
Source: Aiddata and WB PPI

4. 3 /17
Who provides foreign aid for electrification?
Top six donors: contributions to electrification 1990–2010 (US$Billion)

5. 4 /17
Who receives foreign finance for electrification?
Electrification aid by recipient 1990–2010 Private finance by recipient 1990–2012

6. 5 /17
How much for renewables?
Aid per generation source (US$ Billion) Private investment per generation source (US$b)
0
40
80
120
160
200
240
1990-1993 1994-1997 1998-2001 2002-2005 2006-2010
Billions
Non-renewable Renewable Both
0
4
8
12
16
20
24
28
32
1990-1993 1994-1997 1998-2001 2002-2005 2006-2010
Billion
Non-renewable Renewable N/A

7. 6 /17
Profitability
Humanitarian
Governance
Governance
Humanitarian
Profitability
PRIVATE SECTOR
INTERNATIONAL AID
• Large income per capita
• High energy prices
• Large energy resources
• Good country governance
• Power sector reform: unbundling and privatisation
• Negative African bias
• Good country governance
• Initial stages of power sector reform
• Fast economic growth
What has driven the allocation of aid and private
investment?

8. 7 /17
What is needed NOW to unlock finance for green
electrification? :
Green Growth Diagnostics for Africa
Identification
of the most
binding
constraints
Political
economy
analysis
GCEM
Power
Systems
Reliability
Analysis

9. 8 /17
What is holding back REinvestment in Ghana?
High cost of finance Unattractiveinvestments compared to
alternatives
Low access to
international
finance
Low access tolocal
finance
Lowdomestic
savings
Poorintermediation
Returns toolow Risks too high
Powersectorregulatory
risk
Creditworthinessofthe
off-taker
Macroeconomicrisk

10. 9 /17
Thank you
A.Pueyo@ids.ac.uk
Green Growth Diagnostics for Africa
www.ids.ac.uk/project/green-growth-diagnostics-for-africa
Pro-poor access to electricity
www.ids.ac.uk/idsresearch/pro-poor-electricity-provision-programme