Developing Nations Fall Back on Solar Investment: What’s Delaying Clean Energy Shift?

Investments clean-tech solar energy in developing nations has decreased 20% compared to last year, according to International Solar Alliance (ISA) Director-General Ashish Khanna.

The International Solar Alliance (ISA) partnered with Business Mauritius to launch a two-day SolarX Accelerator Programme on April 8 in Moka in Mauritius. The programme aims to support the development of innovative solar solutions and facilitate collaboration between governments, regulators and the private sector, reported CNBCTV18.

“To facilitate collaboration among the private sector, government, regulators, and stakeholders, SolarX was first launched in Africa, followed by the APAC region. This approach is critical, especially considering that overall investment in clean-tech solar energy has decreased by 20% in developing countries compared to last year," Khanna told Mint.

The SolarX Global Accelerator 2025 will bridge this gap by connecting entrepreneurs with investors, providing tailored mentorship, fundraising training and access to financing opportunities, reported Mint.

“We are confident that the entrepreneurs from the Africa and Asia-Pacific (APAC) regions will contribute to a valuable transfer of technological ideas, which can aid the energy transition in various countries," Khanna added.

“For example, a solution developed in Nigeria could have practical applications in India, and a solar application in Fiji could work across all the islands in the Pacific," he shared.

Challenges in Clean Energy Transition  

According to a 2024 report by International Energy Agency (IEA), the high cost of capital for new projects is deterring several emerging and developing economies from proceeding with the clean energy transition.

The IEA report further noted that the global clean energy investment has increased by 40% since 2020, reaching an estimated $1.8 trillion in 2023 but almost all the recent growth has been in advanced economies and in China.

In contrast, other emerging and developing economies account for less than 15% of total investment, despite housing 65% of the world’s population and generating about a third of global gross domestic product. The report also stated that capital flows to clean energy projects in many emerging and developing economies “remain worryingly low”.

Emphasising the need to bridge the gap between investor seeking clean energy opportunities and markets where this investment is required, IEA Executive Director Faith Birol said, “Reducing risk through clear and timely regulation is a first step to attract investment. This needs to be underpinned by a significant increase in financial and technical support from the international community.”