•Warns developing economies risk falling behind
By Uche Usim
The United Nations Conference on Trade and Development (UNCTAD) has warned that the global shift to renewable energy will demand more than $1 trillion in annual investments by 2030.
This has raised concerns that developing economies could struggle to meet climate targets without stronger foreign capital inflows and access to modern technologies.
The warning is contained in a new UNCTAD report titled “Energy Transition Investment and the Transfer of Knowledge and Skills: Implications for Investment Treaty Design,” which underscores the scale of financing required to overhaul the global energy system as countries push to cut fossil fuel dependence and achieve net-zero emissions.
According to the report, private capital is already dominating renewable energy financing, accounting for over 80 per cent of investments across the value chain. However, this trend places developing economies at a disadvantage, as they increasingly depend on foreign direct investment (FDI) to bridge funding gaps.
“Especially for developing economies, attracting foreign direct investment (FDI) may be a prerequisite for the energy transition as domestic capital and development funds are insufficient to meet projected needs,” UNCTAD stated.
Beyond funding, the report stressed that access to advanced technologies, technical expertise and skilled labour will be critical to building and sustaining clean energy infrastructure. While some emerging markets are gradually moving up the value chain and participating in global clean technology manufacturing, significant barriers remain.
UNCTAD identified high borrowing costs, weak infrastructure, regulatory uncertainty and limited access to long-term financing as key constraints slowing renewable energy investment across Africa, Asia and Latin America. It warned that failure to mobilise adequate investment could widen global inequality, delay climate action and expose vulnerable economies to future energy shocks.
The agency, however, noted that sectors such as solar, wind, battery storage, hydrogen and electric mobility present major economic opportunities if countries can unlock financing and technology transfer.
In Nigeria, the push to strengthen climate financing is gaining traction. The administration of Bola Tinubu has approved the National Carbon Market Framework and operationalised the Climate Change Fund, while restoring the National Council on Climate Change to the federal budget. Experts say deeper incentives and large-scale solar investments could unlock an estimated $2.5 billion carbon market opportunity for the country.
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