Global investments in the energy transition reached a new record of USD 2.4 trillion in 2024 – a 20% increase compared to the average annual levels of 2022/23.
About one-third of the total was directed towards renewable energy technologies, pushing renewable energy investment to USD 807 billion.
Despite this milestone, year-on-year growth in renewables slowed significantly. Annual investments increased by 7.3% in 2024, compared to 32% the previous year, according to a new report by the International Renewable Energy Agency (IRENA) and the Climate Policy Initiative (CPI).
The Global Landscape of Energy Transition Finance 2025 was released ahead of the UN Climate Conference COP30 in Belém, Brazil. It aims to inform the global finance dialogue and support delegations by tracking investments in renewable energy technologies and their supply chains, examining regional trends, and identifying finance sources and instruments.
The findings show that 96% of renewable energy investments went to the power sector, with global investment in solar PV hitting a record USD 554 billion in 2024, up by 49%.
Commenting on the report, Francesco La Camera, Director-General of IRENA, said:
“Investments in energy transition continue to grow but not at the pace needed to achieve the global goal of tripling renewable capacity by 2030. Funding for renewables is soaring but remains highly concentrated in the most advanced economies. As countries gather at COP30 to advance the ‘Baku to Belém Roadmap to 1.3 trillion’, scaling finance for emerging and developing countries is essential to make the transition truly inclusive and global.”
IRENA’s report shows that advanced and major economies can draw on domestic financial resources to fund energy transitions. In contrast, lower-income countries depend on external support due to underdeveloped financial markets, limited fiscal capacity, high capital costs, and debt vulnerabilities, among other constraints.
Globally, nearly half of total investment in 2023 was provided as debt, most of it at market rates. The remainder came through equity, while grants accounted for less than 1%.
The urgent need to mobilise investments, combined with the scarcity of impact-driven capital such as low-cost debt and grants, risks worsening existing debt burdens.
Mr. La Camera added: “IRENA has long called for smarter use of public funds to unlock private investment through risk-mitigation tools. Yet the heavy reliance on profit-driven capital is leaving developing countries behind. Where private finance won’t flow, the public sector must lead—backed by stronger multilateral and bilateral cooperation and scaled-up climate finance.”
The report also highlights that investment in energy transition supply chains and manufacturing remains critical but is highly concentrated. China accounted for 80% of global investment in manufacturing facilities for solar, wind, battery, and hydrogen technologies between 2018 and 2024.
Encouragingly, new factories are beginning to emerge outside advanced economies and China, expanding energy security and socio-economic benefits to other developing regions.
Overall, global investment in factories producing solar, wind, battery, and hydrogen technologies fell by 21% to USD 102 billion in 2024, driven by a significant drop in solar PV manufacturing investment. In contrast, battery factory investment nearly doubled to USD 74 billion, reflecting rising demand for storage in grids, electric vehicles (EVs), and data centres.
Foreign direct investment—through joint ventures, technology partnerships, and knowledge sharing—will be essential for strengthening international cooperation and expanding energy transition manufacturing in emerging and developing economies, including through South-South collaboration.
In addition, dedicated policies are needed to ensure these activities are conducted in a socially and environmentally sustainable manner and that their benefits are shared equitably.
Discover more from Energy News Africa
Subscribe to get the latest posts sent to your email.