Accelerating energy transition in developing countries

Accelerating energy transition in developing countries is a project proposal that addresses the complex nature of energy transition in developing countries. It follows a unique view in the process of energy transition given the fact that the pattern in developing countries is not predictable, as many countries struggle to meet the bare minimum energy consumption per capita.

Climate change manifests in rising global warming and poses an existential threat to human well-being. Countries across the globe experience climate stress in one way or another. The impact is severe in developing countries as it directly affects people's livelihoods relies on agriculture, and has limited capacity to adapt.

Given the complexity of the energy transition process involving different stakeholders, covering various topics, regions, and the difficulty of designing a uniform transition policy, examining the process from broader perspectives is vital. For three reasons project delves into the interrelationship between energy transition, country risk profile, and socio-economic outcomes in developing countries is imperative.

Two challenges to energy transition are identified in this project. First, Africa has an energy deficit. The majority of countries are energy importers. Coupled with low access to energy the mere shift from fossil fuel to renewables is not promising. Second, there is heavy reliance on traditional energy sources. As a result, projecting energy transition in developing countries with a high degree of certainty is contentious.

This project examines the nature of energy transition, identifies factors that determine the speed of energy transition, and explores mechanisms in which transition could also achieve alternative development targets.

This project delves into the following three interlinked objectives. First, how energy dependence determines the speed of energy transition; in this segment, I explore the dynamics of being an energy importer or exported is a key factor determining transition. Second, given that a huge investment is needed for the transition into renewables, public investment is insufficient to realize the transition quickly. And yet, private investment is low because the return on investment is low. Therefore, the country's risk profile (derisking) plays a significant role in accelerating energy transition. Thus, this segment answers how energy transition depends on the country's risk profile. The third and most important aspect in the developing country context is that transition is not for reducing global warming, merely. Climate-related investment should achieve other socioeconomic development goals. Hence, I will answer whether there exists a plausible relationship between climate finance and development outcomes in such a way as to synergize the efforts for a green growth path.