Bridging the gap: finance for energy access in the Green Climate Fund

Populations lacking energy access are geographically concentrated: About 80% live in 27 countries – referred to here as “high-impact” countries – mostly in sub-Saharan Africa and South Asia.

The 2030 Agenda for Sustainable Development sets universal clean energy access as a development priority for 2015–2030. Sustainable Development Goal 7 is “to ensure access to affordable, reliable, sustainable and modern energy for all” by 2030. However, despite the global attention this issue has received, large financing gaps pose a significant obstacle to universal energy access.

Public climate finance is currently a small portion of sustainable energy finance, but it is recognized as an important catalyst to leverage additional public and private funds to close the energy gap. The Green Climate Fund (GCF), which became operational in 2015, is particularly important in this context. It is the world’s newest and largest multilateral climate finance entity, with the mission to support transformative change, including the explicit goal to increase low-emission energy access. It thus has a direct and important role to play in reducing the energy access deficit.

The GCF defines energy access interventions as those that “seek to increase household, community or productive uses of energy by an off-grid, mini-grid or cooking system”. Advancing renewable energy access contributes to two core objectives of the Fund: contributing to low-emission development, and aiding in building climate resiliency for the most vulnerable populations.

The GCF categorizes projects within two thematic windows – mitigation or adaptation – or as a combination of both, considered to be “cross-cutting” projects. Though energy access projects often have adaptation benefits, projects that are primarily energy-focused are evaluated within the mitigation window. Improving sustainable energy access is one area of focus (called “impact area”) within this window.

Based on an analysis of publicly available documents of all approved GCF Funding Proposals from 2015 to July 2018, this briefing paper examines how much funding is directed to improving energy access.

The authors find that energy access interventions have received significantly less funding than other forms of energy projects that do not explicitly support the energy-poor. Furthermore, energy funds in the GCF are largely neglecting the high-impact countries, which are most in need of energy access, as well as low-income countries more broadly.