A strategic dialogue convened by IRENA, the Breakthrough Agenda and the Energy Transition Council

Over twenty Energy Transition Council (ETC) partners – including Ministers, international organisations, philanthropic organisations and Multilateral Development Banks (MDBs) – joined the UK and the Philippines co-chairs at the 10th ETC Ministerial on 13 November 2024 at COP29 in Baku, Azerbaijan. Convened by Francesco La Camera, Director-General of the International Renewable Energy Agency (IRENA), the strategic dialogue focused on accelerating investment in clean power systems across key Emerging Markets and Developing Economies (EMDEs).

Ministers and senior decision makers from key international organisations from across the membership of the IRENA, the Breakthrough Agenda and the ETC discussed ongoing initiatives and identified areas requiring stronger coordination to mobilise investment and overcome financing barriers in the Global South. The Ministerial also focused on ensuring a just and equitable clean energy transition and explored how ETC members and partners can deliver the COP28 energy package to triple renewable capacity and double energy efficiency by 2030. ETC partners reinforced the importance of connecting diverse range of initiatives to enhance international collaboration and collective action.

The Ministerial emphasised the urgency of scaling investment in clean power systems in EMDEs to meet the global clean energy transition goals and ensure the energy transition is inclusive and equitable. According to the International Energy Agency (IEA), around 85% of the cuts in unabated fossil fuels needed for a Paris-aligned pathway by 2030 could come from achieving the COP28 energy efficiency goals. However, clean energy investments need to double in advanced economies and China by 2035 and increase six-fold in EMDEs from $270 billion today to $1.6 trillion by 2030.

Similarly, IRENA’s analysis shows that half of the world’s population – living in more than 150 economies outside Brazil, China and India – received just 10% of the world’s energy transition investments in 2023 and 140 EMDEs received less than 7% of global investments. Addressing this disparity and mobilising investment requires action on multiple fronts and across a diverse range of actors, including governments, MDBs, major climate funds and the private sector.

ETC partner countries stressed that the energy transition is not only necessary to mitigate the effects of climate change but also for alleviating energy poverty. Millions of people still lack access to affordable, reliable, sustainable and modern energy. ETC partners emphasised the importance of improving grid infrastructure, enhancing energy efficiency, tackle financing barriers, including high interest rates, and addressing power infrastructure vulnerabilities exacerbated by climate change.

The energy landscape of EMDEs is rapidly evolving, with a need to shift from fossil fuel-based systems to renewable energy sources – like solar and wind – and to energy storage. However, investment is critical to decarbonise energy systems while supporting economic growth, creating jobs and ensuring energy security. Current financial flows are insufficient, and systemic barriers like market risks, weak financial infrastructure and regulatory uncertainty must be resolved to mobilise capital effectively. Public funding should be leveraged to attract private investment through risk mitigation, concessional funding, on-lending schemes and expanded guarantees, including insurance for high-risk projects in low-credit countries. Therefore, increased investments in renewable energy, energy efficiency and grid infrastructure – supported by robust data to map resource potential – are essential for a successful energy transition in EMDEs.

Robust capacity building, technical assistance and knowledge sharing were highlighted as crucial to this transition and key enablers for scaling clean power in EMDEs. Strengthening regulatory, policy and technical frameworks are essential to establish stable, predictable environments that will attract large-scale renewable energy investments. International support is crucial for improving governance and enhancing energy planning in EMDEs, enabling them to signal a long-term commitment to energy transition and provide the certainty investors need. Addressing these regulatory and institutional barriers and providing targeted capacity-building support are therefore urgent priorities for accelerating the transition in EMDEs.

Francesco La Camera, Director-General of IRENA, said:

Transitioning to renewable energy is not just key to achieving net zero emissions and limiting global temperature rise to 1.5°C, but is also an essential driver for economic growth and social well-being.

For developing economies, this transition is particularly urgent, and only by embracing renewable energy can these regions unlock new opportunities for sustainable growth, job creation, local supply chains and improved living standards.

Bold, visionary action and innovative solutions are critical to achieving a sustainable, net zero future. Public funding must be strategically directed to meet regional needs, with increased support in markets where private capital is limited. We must ensure investments focus on impact and advancing key Sustainable Development Goals.

Rachel Kyte, UK Special Representative on Climate, said:

Our goal is to put developing countries truly at the heart of the international support system to help mobilise investment behind their nationally led energy transition plans. The ETC has a significant role to play in this complex energy transition journey of our partner countries. The ETC will continue to mobilise, coordinate and implement financial and technical assistance in the power sector to accelerate the clean energy transition in partner countries.

Felix Fuentebella, Undersecretary at the Philippines Department of Energy, said:

The energy transition presents a powerful opportunity to reshape economic models in ways that create green jobs, improve public health and empower communities to ensure a truly inclusive transition – leaving no one behind. Our task now is to advance from plans to implementation and deliver on the COP28 Global Renewables and Energy Efficiency Goals.

The ETC serves as a critical forum for fostering political dialogue between partner and donor countries, strengthening partnerships with international organisations and enhancing the delivery of energy transition initiatives in key EMDEs.

The ETC plays a vital role in facilitating international cooperation among governments, MDBs and technical experts to support clean energy investment. It works closely with multilateral coalitions like the Breakthrough Agenda and IRENA to support collaborative frameworks that unlock funding for clean energy. The ETC remains committed to fostering dialogue, sharing best practices and helping countries develop frameworks for financing clean power systems while strengthening government capacities in EMDEs to accelerate and sustain the global energy transition.

Through coordinated global action, backed by technical support, long-term energy transition finance and strong partnerships, ETC partner countries will be well positioned to accelerate their path to a sustainable energy future.