Unlocking Finance to Scale Decentralised Renewable Energy for Clean Energy Transitions: Learnings from India

TF-4: Refuelling Growth: Clean Energy and Green Transitions Decentralised renewable energy (DRE) technologies play a critical role in enabling an equitable energy transition and ensuring energy security for many emerging and developing economies. These technologies address three of the most pressing challenges faced in developing countries: they support diverse energy needs and, thereby, the livelihoods of large populations; they help in reaching the last mile, specifically in climate-vulnerable geographies with unreliable connectivity to electricity; and finally, they meet rising energy demands in a climate-responsible manner. Unlocking finance, for both users and enterprises, holds the key to mainstreaming these technologies for a just energy transition. To address this financing challenge, this brief proposes (a) establishing a multi-stakeholder focus group under the Energy Transitions Working Group for DRE, (b) providing capital support to pilot innovative financial instruments in the DRE sector, and (c) creating a robust framework for knowledge sharing among member countries through dedicated monitoring and impact evaluation efforts. 1. The Challenge Decentralised Renewable Energy: Key to an equitable energy transition In many low- and middle-income economies, the livelihoods of millions of marginalised populations are strained due to a lack of access to reliable and affordable energy. Additionally, around 75 million people are likely to lose existing access to electricity due to rising prices. [1] Economies around the world, especially developing economies, are still recovering from the COVID-19 pandemic. Problems of rising inflation, [2] unemployment, and soaring interest rates continue to plague them. Against this backdrop, it is imperative for emerging economies to build development pathways that are inclusive of marginalised populations so that they are not driven down further into poverty. Decentralised renewable energy (DRE) can play a crucial role in building this resilience. DRE provides affordable and reliable energy access while supporting a variety of livelihoods. There is a potential US$53 billion market for clean energy technologies in India and a US$11 billion market across Africa. [3] DRE can also help play a crucial role in job creation in developing economies, thereby driving economic growth. For example, the sector is projected to employ 89,000 and 58,000 individuals in India and Kenya, respectively, by 2023. [4] [5]