Clean energy investment in emerging economies declined by 10% in 2020

Global clean energy transition investments reached an all-time high of $501.3 billion in 2020, according to Bloomberg NEF.

However, emerging economies experienced a 10% decline in clean energy investments compared to 2019, representing a $67 billion less investment in clean energy projects in 2020 than developed economies.

The 10% reduction in 2020 resulted from a shift due to the COVID-19 pandemic and financiers preferring to invest in lower-risk, OECD countries. Another reason the report noted was the boom in the electric vehicle market in Western Europe and the United States. Investments in the electric vehicle market in 2020 was $139 billion, up 28% from 2019.

According to the IEA, the global light-duty electric vehicle (EV) grew by 43% compared to 2019. And original equipment manufacturers such as the Toyota Group and General Motors has committed to increasing EV production in the coming years.

On the other hand, the emerging economies are not left out, with China presently dominating the electric vehicle market and additional investment planned in the future years. According to UNEP, African countries are also beginning to play in the market, with countries such as Kenya, Rwanda, and Sierra Leone introducing two- and three-wheelers. Additionally, Tunisia, Mauritius, and Cote d'Ivoire have introduced electric light-duty vehicles, and zero-emission buses have been introduced in South Africa and other countries.

With emerging economies such as China, India, and the UAE committing to achieve net-zero emissions in the next semi-centennial, we foresee a boom in investment into emerging economies in the coming years.