Why is 87% of Power Investment in the global south focused on renewables?

Date : 2025-04-30

Published in Energy

Highlights

* The Global South is accelerating solar and wind adoption, outpacing China in growth despite lagging the Global North.
* The IEA forecasts a 60% rise in solar and wind capacity in the region this year, exceeding 70 gigawatts.

The Global South is gaining traction in renewable energy, accounting for 87% of power investments in 2024 and advancing towards clean technology. Solar and wind energy generation in developing countries has grown at an average annual rate of 23%, narrowing the clean energy transition gap to ?ve years.

This region, which includes Latin America, Africa, South Asia, and Southeast Asia, holds 70% of the worlds renewable resources. Recent initiatives have focused on leveraging this potential, driven by energy security challenges due to low per capita fossil fuel reserves. Approximately 80% of the countries in the Global South depend on fossil fuel imports.

Vikram Singh, Senior Principal of Global South at RMI, noted that boosting clean energy investments in developing nations could accelerate economic growth, improve energy security, and widen access to energy.

The report highlights Brazil's progress as the second-largest contributor to global wind and solar capacity growth in 2023, following China. However, renewable energy forms less than 5% of the power mix in regions such as Africa and Southeast Asia.

Ahead of COP29, discussions on climate ?nance are expected to focus on establishing a new collective goal to assist emerging economies in transitioning to renewable energy. Singh stressed the importance of timely support to enable developing nations to harness clean energy potential and meet the 1.5C target.

Although strides have been made, ?nancial constraints remain a signi?cant challenge. A panel of experts, led by Vera Songwe, Co-Chair of the Independent High-Level Expert Panel on Climate Finance, has called for a sixfold increase in annual clean energy investments to meet the 2030 target of triple renewable energy capacity worldwide.

Adair Turner, Chair of the Energy Transitions Commission, underlined the urgency of mobilising private investment, government grants, and philanthropic contributions to ensure suf?cient ?nancial resources for a net-zero future.

Despite these obstacles, the report reveals that fossil fuel demand has already peaked in one-third of the Global South, with a further decline in electricity demand from fossil fuels expected by 2030.