.jpg)
Emerging markets are missing out on the wave of clean energy investment seen since 2020, according to the International Energy Agency (IEA): “Global clean energy investment has risen 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. By contrast, other emerging and developing economies account for less than 15% of total investment, despite being home to 65% of the world’s population and generating about a third of global gross domestic product.”
As the IEA points out, all pathways to a successful transition require expanding capital flows to clean energy in emerging economies, many of which have fast growing energy demand. It identified five priorities to keep “1.5°C alive” in its 2023 World Energy Outlook. Most notable was the need for three times the current level of investment in clean energy in emerging markets ex-China by 2030 versus 2022.
Bond opportunities in renewable energy
At Lazard, we have identified several investment opportunities in both emerging markets equity and debt (EMD) — our focus in this article — created by the clean energy transition.
Among the transition-related investment openings in EMD, some of the most significant arise from the growth in renewable power projects. Many emerging economies benefit from material solar and/or wind generation potential. This could help these countries meet their growing energy demands and accomplish the global aim of a just transition. A combination of major wind and/or solar generation potential, improving regulatory frameworks, the de-risking of renewable technologies, and growth in power demand suggests genuine possibilities in this space.
Read the full ‘Sponsored Commentary’ article at the link below
.jpg)
