In 2016, the Catholic Agency for International Development and ODI published an analysis of UK support for energy in developing countries for the period 2009-13. The research looked at all funding channels (bilateral and multilateral) including UK Export Finance (UKEF). The aim was to understand:
- how much UK public finance was flowing to energy investments in developing countries;
- what types of energy and stages of delivery the UK is supporting and through which channels;
- which countries and regions support is flowing to; and
- the proportion going to energy access.
This paper builds on the 2016 analysis and illustrates that UK support in this period heavily favoured fossil fuels over renewables, with 22% of the total support spent on renewables and almost half of the support (46%) going to fossil fuels.
To be consistent with the UK’s climate change and poverty reduction goals, a rebalancing of UK support for energy in developing countries is required. There must be a strong presumption against supporting fossil fuel investments, with an urgent phase out of coal support, along with prioritisation of support for energy access, renewable energy and energy efficiency. This is crucial to enable poorer countries to shift or leapfrog to sustainable energy pathways, in line with a 1.5°C pathway and reaching net zero emissions globally by 2050.
A ‘whole portfolio’ approach is also needed, so that both ODA and non-ODA support are consistent, to ensure policy coherence. Similar coherence with climate change and poverty reduction goals is needed in the case of individual energy investments, along with robust safeguards for mitigating climate, environmental and social risks. Business-as-usual support for already highly-subsidised fossil fuel technologies, including through UKEF, as well as support for large-scale hydro power investments which carry high environmental and social risks, is inconsistent with such an approach.
Read the complete Policy Briefing.