UNCTAD Seeks $1tn Annual Renewable Energy Investments

The United Nations Conference on Trade and Development (UNCTAD) has said the global shift to renewable energy will require more than $1tn in annual investments by 2030, warning that many developing economies may struggle to meet climate and energy targets without stronger foreign direct investment (FDI) inflows and wider access to clean technologies.

In a new report titled “Energy Transition Investment and the Transfer of Knowledge and Skills: Implications for Investment Treaty Design,” the United Nations Conference on Trade and Development said the financing gap for the global clean energy transition remains significant as countries intensify efforts to reduce reliance on fossil fuels and achieve net-zero emission targets.

According to the report, renewable energy financing is increasingly being driven by private capital, with more than 80 per cent of investments across the renewable energy value chain currently coming from private sector sources.

UNCTAD noted that developing economies are expected to depend heavily on foreign investment to finance their energy transition projects due to insufficient domestic capital and limited development funding.

“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,” the organisation stated.

The report added that emerging economies are gradually moving up the clean technology value chain and becoming more active in global innovation and manufacturing activities linked to renewable energy.

It stressed that beyond financing, countries would also require access to advanced technologies, technical expertise, and skilled labour to effectively deploy and manage clean energy infrastructure.

UNCTAD further warned that developing economies across Africa, Asia, and Latin America continue to face major barriers to renewable energy investment despite rising global demand for clean energy solutions.

Among the key challenges identified were high borrowing costs, weak infrastructure, regulatory uncertainty, and limited access to long-term financing, all of which continue to slow renewable energy investment flows into developing markets.

The organisation said sectors such as solar energy, wind power, battery storage, hydrogen, and electric mobility present major economic opportunities for emerging economies if financing and technology transfer improve.

It also highlighted the growing importance of industrial policy, innovation, and strategic partnerships in helping countries build local clean energy manufacturing capacity and strengthen energy security.

UNCTAD warned that failure to mobilise sufficient investments could widen global inequalities, slow climate action and expose vulnerable economies to future energy and economic shocks.

Meanwhile, Nigeria has intensified efforts to strengthen climate finance and expand renewable energy investments as part of broader economic diversification and sustainability goals under the administration of Bola Tinubu.

Experts recently urged the Federal Government to deepen investments and introduce stronger incentives for large-scale solar deployment, noting that Nigeria could unlock an estimated $2.5bn carbon market opportunity.

The Federal Government recently approved the National Carbon Market Framework and operationalised the Climate Change Fund to improve climate finance initiatives across the country.

The administration also restored the National Council on Climate Change to the federal budget line as part of efforts to strengthen institutional support for climate-related programmes.