Global investment in energy transition technologies, including energy efficiency, reached a record high of USD 1.3 trillion in 2022. However, annual investments need to at least quadruple to remain on track to achieve the 1.5°C Scenario in IRENA’s World Energy Transitions Outlook 2023. Investment in renewable energy was also unprecedented – at USD 0.5 trillion – but represented less than one third of the average investment needed each year. Investments are also not flowing at the pace or scale needed to accelerate progress towards universal energy access; investments in off-grid renewable energy solutions in 2021 – at USD 0.5 billion – fell far short of the USD 2.3 billion needed annually in off-grid solar products alone (not including mini-grids).

Scaled up renewable energy investment, on the foundation of sound enabling policy frameworks, is critical to accelerate the global energy transformation and reap its many benefits, while achieving climate and development targets.

By addressing key risks and barriers, public finance, including climate finance, plays an important role in bridging the financing gap and attracting further investment from the private sector to renewables. Institutional investors, such as pension funds, insurance companies, endowments and sovereign wealth funds, have the potential to scale up major investments. IRENA’s ETAF Platform is an inclusive, multi-stakeholder climate finance platform to facilitate capital mobilisation to scale up the development of renewable energy projects to advance the energy transition across developing markets. Through another join initiative, Climate Investment Platform (CIP), IRENA focuses on technical assistance for projects to reach commercial feasibility readiness for matchmaking with financial institutions or partners.