Development aid for energy in Small Island Developing States

This paper presents a global mapping of development finance for energy sectors in Small Island Developing States (SIDS). It analyses if this finance is supporting renewable energy, and if it has been targeted to different recipient countries based on either income status or rates of access to electricity, and whether these rates have actually improved. Furthermore, it asks if financial commitments are in fact being disbursed.

Focusing mainly on the period 2002–2016, we use data reported by bilateral and multilateral sources to the Organisation of Economic Cooperation and Development’s Development Assistance Committee on financial support to 37 SIDS. Our analysis includes almost 5700 energy-related transactions between 2002 and 2016. Data on populations and electricity access rates of individual countries come from the World Bank’s Open Data platform.

The authors find an increase in funding since 2009 and a shift towards renewables, and solar particularly, though oil-fired plants and other non-renewables continue to be funded. Energy aid is unevenly spread between SIDS, on a total and a per capita basis. There is little correlation between the allocations made to individual countries and either their income or energy access gaps, and improvements in electricity access have been slow in those countries where the gap is largest. We also identify low disbursement rates, suggesting implementation problems.

The authors conclude that there is an urgent need to improve the quantity and quality of aid to help SIDS tackle their significant energy challenges.