According to UNCTAD Global Investment Trends Monitor, developing countries face a $2.2 trillion annual investment gap for the energy transition.
International investment in SDG (Sustainable Development Goals) sectors in developing countries increased in 2022, with project numbers growing in infrastructure, energy, water and sanitation, agrifood systems, health and education.
International investment in renewable energy has nearly tripled since the adoption of the Paris Agreement in 2015. However, much of this growth has been concentrated in developed countries.
..the report said.
But the increase since the SDGs were adopted in 2015 is relatively modest due to weak growth in the early years and the sharp decline in investment during the COVID-19 pandemic.
The report shows that, despite the growth, the annual SDG investment gap in developing countries has widened from $2.5 trillion in 2015 to an alarming $4 trillion. The increase stems from both inadequate investment and additional needs.
A significant increase in investment in sustainable energy systems in developing countries is crucial for the world to reach climate goals by 2030.
…UNCTAD secretary general Rebeca Grynspan said.
Developing countries’ energy investment needs, estimated at $2.2 per year – make up more than half the gap. This refers to investment in energy generation, energy efficiency and low-carbon transition technologies and sources. Large gaps also exist for water and transport infrastructure.
Furthermore, the widening SDG investment gap in developing countries stands in contrast to positive trends observed in sustainability investment in global capital markets. The sustainable finance market grew 10% to $5.8 trillion in 2022.
Despite a decline in the market value of the global sustainable fund market from its high of $2.7 trillion in 2021 to $2.5 trillion in 2022, net inflows to the market were positive, in contrast to traditional funds, which experienced net outflows, the Unctad report said.
Credit: UNCTAD
World Investment Report 2023 reveals that developing countries face a $2.2 trillion annual investment gap for the energy transition.@UNCTAD calls for urgent support to developing countries to attract more investment in clean energy.
Explore the report➡️https://t.co/InWDciEaNW pic.twitter.com/VOyunJ2ZcE
— UNCTAD, the UN trade & development body (@UNCTAD) July 5, 2023
