Developed nations have been accused of promoting the development of fossil fuels instead of renewable energy sources. An analysis of a study carried out by Oil Change International, a clean energy advocacy group revealed that 60 percent of the $59.5 billion energy aid for energy projects was spent on fossil fuels, while just 18 percent was allocated to the development of renewables.
Ironically, governments that were moving away from fossil fuels at home continued to fund such projects in Africa, where communities are experiencing the worst impact from climate change, the study showed.
According to the study, Egypt, Angola and South Africa received nearly half of the aid for energy over this period, and of the international development banks and 10 countries examined for the study, China gave the most to the energy sector, providing $5billion a year, 88 percent of which was spent on fossil fuels.
After China, the World Bank Group came second, while Japan and Germany occupied the fourth and fifth position. The report estimated World Bank financed mostly fossil fuel infrastructure over this period, although such lending is expected to fall after a recent announcement that it would end finance for upstream oil and gas from 2019, however, World Bank disputes the estimates.
The report showed less than two percent of aid to Africa’s energy sector went to renewables, which experts say are ideally suited to the continent’s scale, development status and sparse population density.
“When deciding on energy projects in Africa, the most important question should be: is this project in the best long-term interests of the people?” Thuli Makama, senior advisor for Africa at Oil Change International said.
“Governments should improve transparency around contracts, financing terms and energy planning, and engage in more meaningful dialogue with civil society to address this question.”
A spokesman for the World Bank however said that while it welcomed efforts to quantify public finance for energy in Africa, it disagreed with the methodology used in the report and the figures published for WBG.
He said: “The World Bank is committed to helping countries improve access to affordable, reliable and sustainable energy in Africa and in other regions.”
He added that WBG had financed 25 percent of all the solar mini-grid projects in developing countries, mainly in Africa and South Asia, and was “on track to provide 20 percent of the total projected investment needed in off-grid solar home systems for the developing world over the next four years.”
He said the World Bank Group had exceeded the climate finance target it set for 2020, including by directly supporting or integrating 18 gigawatts of additional renewable energy into electricity grids and mobilizing more than $10billion in commercial finance for clean energy over the past two years.