Developing countries are facing a massive investment shortfall in the renewables sector and require debt relief to create fiscal space that supports clean energy transition to meet their climate and sustainable development goals.
They require about $1.7 trillion per year in the clean energy sector but only managed to attract foreign direct investment worth $544 billion in 2022, the UN Conference on Trade and Development (Unctad), said in its World Investment Report on Wednesday.
“International investment in renewable energy has nearly tripled since the adoption of the Paris Agreement in 2015. However, much of this growth has been concentrated in developed countries,” Unctad researchers said in the report.
“More than 30 developing countries have not yet registered a single utility-sized international investment project in renewables.”
With interest rates soaring globally, the cost of capital is a key barrier for energy investment in developing countries that are grappling with mounting external debt, with limited fiscal space.
“Bringing in international investors in partnership with the public sector and multilateral financial institutions significantly reduces the cost of capital,” the report said.
The UN body called for the “de-risking of energy transition investment” through loans, guarantees, insurance instruments and the equity participation of the public sector and multilateral development banks.
“De-risking support to lower the cost of capital for energy transition investment in developing countries must be vastly expanded,” the Unctad researchers said.
The total funding needs of developing countries for the energy transition are much larger and include investment in power grids, transmission lines, storage and energy efficiency.
Developing nations face an annual funding gap of $2.2 trillion when it comes to the energy transition, a key requirement for these nations to achieve their climate goals.
This funding gap is part of a total $4 trillion annual shortfall they are facing in terms of sustainable development goals, Unctad said.
“A significant increase in investment in sustainable energy systems in developing countries is crucial for the world to reach climate goals by 2030,” Unctad secretary general Rebeca Grynspan said.
To stay close to the goal of limiting global warming to 1.5°C above pre-industrial levels, the world needs about one-and-a-half times the current global gross domestic product in investment between now and 2050, Unctad said.
However, after a steep drop in 2020 and a strong rebound in 2021, global FDI declined by 12 per cent in 2022, to $1.3 trillion.
The slowdown was driven by global crises, including the war in Ukraine, high food and energy prices, and mounting debt pressures.
International project finance and cross-border mergers and acquisitions were especially affected by tighter financing conditions, rising interest rates and uncertainty in capital markets, and Unctad expects pressure on global FDI to continue this year.
“Global FDI trends are in line with other macroeconomic variables, which show either negative or slow growth rates,” Unctad researchers said.
“Early indicators confirm the negative FDI outlook: FDI project activity in the first quarter of 2023 shows that investors are uncertain and risk averse.
“The number of international project finance deals in the first quarter of 2023 was down significantly; cross-border M&A [merger and acquisition] activity also slowed.”
Although FDI in developing countries last year increased by 4 per cent to $916 billion, or more than 70 per cent of global flows, the rise was uneven across countries, with much of the growth concentrated in a few large emerging economies.
The number of greenfield investment projects announced in developing countries increased by 37 per cent, and international project finance deals by 5 per cent, which are “positive signs for investment prospects in industry and in infrastructure”, the report said.
However, FDI in Africa dropped to the 2019 level of $45 billion after “anomalously high levels in 2021”, caused by a single financial transaction.
Greenfield project announcements increased by 39 per cent and international project finance deals by 15 per cent.
FDI inflows in developing Asia were flat at $662 billion but still accounted for more than half of global FDI, with India and members of the Association of South-east Asian Nations being the top recipients.
China, the second-largest FDI host country in the world, registered a 5 per cent increase last year, the report said.
FDI flows to Latin America and the Caribbean increased by 51 per cent to $208 billion, the highest level ever recorded.
Although FDI flows to the Gulf region declined overall, the number of project announcements increased by two thirds, according to the report.
Sustainability-themed investments remained resilient last year, with the value of the overall sustainable finance market reaching $5.8 trillion in 2022, despite high inflation, rising interest rates, poor market returns and the looming risk of a recession that all affected financial markets.
Sustainable funds continued to be more attractive to investors than traditional funds.
Despite a decline in the market value of the global sustainable fund market from its high of $2.7 trillion in 2021 to $2.5 trillion in 2022, net inflows to the market were positive, in contrast to traditional funds, which experienced net outflows, the Unctad report said.
As part of efforts to tackle climate change, public pension and sovereign wealth funds have also developed an increased focus on sustainability strategies, directing more of their assets towards the energy transition.
Renewable energy has become an attractive infrastructure sub-segment for these institutional investors, offering the stable, inflation-hedging qualities of infrastructure while supporting net-zero objectives.
“With a long-term investment horizon, SWFs and PPFs are uniquely positioned for investing in infrastructure and energy, including the renewable energy sector, and have become important investors in the sectors,” the Unctad report said.
“Between 2016 and 2022, PPFs and SWFs significantly increased their investment in renewable energy, driven by policy changes aimed at decarbonising, the continuously decreasing costs of renewables and the need for portfolio diversification.”
Last year, these funds invested $18.7 billion in renewable energy projects, a 21 per cent decline from 2021, but still almost double the annual average since 2016, Unctad said.
Canadian pension funds were the largest source of capital for investment in renewable energy, accounting for 33 per cent of total investment in 2022.
GCC investors contributed 29 per cent while Singaporean funds accounted for 26 per cent.
GIC in Singapore was the largest single investor, followed by Abu Dhabi's Mubadala Investment Company.
“Gulf SWFs are important investors in renewable energy, as they seek to diversify domestic and regional economies and progress towards the Paris Agreement goals,” the Unctad report said.
School counsellors on mental well-being
Schools counsellors in Abu Dhabi have put a number of provisions in place to help support pupils returning to the classroom next week.
Many children will resume in-person lessons for the first time in 10 months and parents previously raised concerns about the long-term effects of distance learning.
Schools leaders and counsellors said extra support will be offered to anyone that needs it. Additionally, heads of years will be on hand to offer advice or coping mechanisms to ease any concerns.
“Anxiety this time round has really spiralled, more so than from the first lockdown at the beginning of the pandemic,” said Priya Mitchell, counsellor at The British School Al Khubairat in Abu Dhabi.
“Some have got used to being at home don’t want to go back, while others are desperate to get back.
“We have seen an increase in depressive symptoms, especially with older pupils, and self-harm is starting younger.
“It is worrying and has taught us how important it is that we prioritise mental well-being.”
Ms Mitchell said she was liaising more with heads of year so they can support and offer advice to pupils if the demand is there.
The school will also carry out mental well-being checks so they can pick up on any behavioural patterns and put interventions in place to help pupils.
At Raha International School, the well-being team has provided parents with assessment surveys to see how they can support students at home to transition back to school.
“They have created a Well-being Resource Bank that parents have access to on information on various domains of mental health for students and families,” a team member said.
“Our pastoral team have been working with students to help ease the transition and reduce anxiety that [pupils] may experience after some have been nearly a year off campus.
"Special secondary tutorial classes have also focused on preparing students for their return; going over new guidelines, expectations and daily schedules.”
Four motivational quotes from Alicia's Dubai talk
“The only thing we need is to know that we have faith. Faith and hope in our own dreams. The belief that, when we keep going we’re going to find our way. That’s all we got.”
“Sometimes we try so hard to keep things inside. We try so hard to pretend it’s not really bothering us. In some ways, that hurts us more. You don’t realise how dishonest you are with yourself sometimes, but I realised that if I spoke it, I could let it go.”
“One good thing is to know you’re not the only one going through it. You’re not the only one trying to find your way, trying to find yourself, trying to find amazing energy, trying to find a light. Show all of yourself. Show every nuance. All of your magic. All of your colours. Be true to that. You can be unafraid.”
“It’s time to stop holding back. It’s time to do it on your terms. It’s time to shine in the most unbelievable way. It’s time to let go of negativity and find your tribe, find those people that lift you up, because everybody else is just in your way.”
PRISCILLA
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UAE currency: the story behind the money in your pockets
THE BIO
Born: Mukalla, Yemen, 1979
Education: UAE University, Al Ain
Family: Married with two daughters: Asayel, 7, and Sara, 6
Favourite piece of music: Horse Dance by Naseer Shamma
Favourite book: Science and geology
Favourite place to travel to: Washington DC
Best advice you’ve ever been given: If you have a dream, you have to believe it, then you will see it.
THE CLOWN OF GAZA
Director: Abdulrahman Sabbah
Starring: Alaa Meqdad
Rating: 4/5
Don't get fined
The UAE FTA requires following to be kept:
- Records of all supplies and imports of goods and services
- All tax invoices and tax credit notes
- Alternative documents related to receiving goods or services
- All tax invoices and tax credit notes
- Alternative documents issued
- Records of goods and services that have been disposed of or used for matters not related to business
The specs
- Engine: 3.9-litre twin-turbo V8
- Power: 640hp
- Torque: 760nm
- On sale: 2026
- Price: Not announced yet
'Panga'
Directed by Ashwiny Iyer Tiwari
Starring Kangana Ranaut, Richa Chadha, Jassie Gill, Yagya Bhasin, Neena Gupta
Rating: 3.5/5
ELIO
Starring: Yonas Kibreab, Zoe Saldana, Brad Garrett
Directors: Madeline Sharafian, Domee Shi, Adrian Molina
Rating: 4/5
Tips to stay safe during hot weather
- Stay hydrated: Drink plenty of fluids, especially water. Avoid alcohol and caffeine, which can increase dehydration.
- Seek cool environments: Use air conditioning, fans, or visit community spaces with climate control.
- Limit outdoor activities: Avoid strenuous activity during peak heat. If outside, seek shade and wear a wide-brimmed hat.
- Dress appropriately: Wear lightweight, loose and light-coloured clothing to facilitate heat loss.
- Check on vulnerable people: Regularly check in on elderly neighbours, young children and those with health conditions.
- Home adaptations: Use blinds or curtains to block sunlight, avoid using ovens or stoves, and ventilate living spaces during cooler hours.
- Recognise heat illness: Learn the signs of heat exhaustion and heat stroke (dizziness, confusion, rapid pulse, nausea), and seek medical attention if symptoms occur.
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
Infiniti QX80 specs
Engine: twin-turbocharged 3.5-liter V6
Power: 450hp
Torque: 700Nm
Price: From Dh450,000, Autograph model from Dh510,000
Available: Now
The specs: 2018 Nissan Patrol Nismo
Price: base / as tested: Dh382,000
Engine: 5.6-litre V8
Gearbox: Seven-speed automatic
Power: 428hp @ 5,800rpm
Torque: 560Nm @ 3,600rpm
Fuel economy, combined: 12.7L / 100km
Conflict, drought, famine
Estimates of the number of deaths caused by the famine range from 400,000 to 1 million, according to a document prepared for the UK House of Lords in 2024.
It has been claimed that the policies of the Ethiopian government, which took control after deposing Emperor Haile Selassie in a military-led revolution in 1974, contributed to the scale of the famine.
Dr Miriam Bradley, senior lecturer in humanitarian studies at the University of Manchester, has argued that, by the early 1980s, “several government policies combined to cause, rather than prevent, a famine which lasted from 1983 to 1985. Mengistu’s government imposed Stalinist-model agricultural policies involving forced collectivisation and villagisation [relocation of communities into planned villages].
The West became aware of the catastrophe through a series of BBC News reports by journalist Michael Buerk in October 1984 describing a “biblical famine” and containing graphic images of thousands of people, including children, facing starvation.
Band Aid
Bob Geldof, singer with the Irish rock group The Boomtown Rats, formed Band Aid in response to the horrific images shown in the news broadcasts.
With Midge Ure of the band Ultravox, he wrote the hit charity single Do They Know it’s Christmas in December 1984, featuring a string of high-profile musicians.
Following the single’s success, the idea to stage a rock concert evolved.
Live Aid was a series of simultaneous concerts that took place at Wembley Stadium in London, John F Kennedy Stadium in Philadelphia, the US, and at various other venues across the world.
The combined event was broadcast to an estimated worldwide audience of 1.5 billion.
'Nope'
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The Sand Castle
Director: Matty Brown
Stars: Nadine Labaki, Ziad Bakri, Zain Al Rafeea, Riman Al Rafeea
Rating: 2.5/5
The specs: 2019 Haval H6
Price, base: Dh69,900
Engine: 2.0-litre turbocharged four-cylinder
Transmission: Seven-speed automatic
Power: 197hp @ 5,500rpm
Torque: 315Nm @ 2,000rpm
Fuel economy, combined: 7.0L / 100km
Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
Transmission: 10-speed auto
Fuel consumption: 11.7L/100km
On sale: Now
Price: From Dh590,000
