Over 800 million people worldwide have no access to electricity. More than 8 out of 10 of them live in fragile states.
1. The g7+ should make expanding energy access in fragile contexts a priority for the next year.
The United Kingdom, as host of both the 47th g7+ summit and the UN Climate Change Conference (COP26) in 2021, should convene DFIs, private sector firms and investors, and governments of fragile states to devise practical means of bringing electricity to millions of people within the next decade. Increased bilateral aid for energy will be a vital element of scale-up efforts.
2. DFIs should scale up energy investments in fragile contexts.
DFIs have a pivotal role to play in strategically deploying public funds to offset the higher risks and costs associated with fragile contexts, ensuring that private sector firms can participate.
3. The private sector’s financial resources, expertise, and management efficiency is needed for sufficient scale to be achieved.
New financing mechanisms can ensure that commercially acceptable returns can be attained, and private sector participation would complement government capacity to boost sector development.
4. Multilateral institutions should scale up access to instruments supporting investments in fragile contexts.
For example, from 2010 to 2019, only 10% of the Multilateral Investment Guarantee Agency’s new guarantee volume was in fragile states. Currency risk management instruments and political risk insurance should be made more affordable for fragile contexts and extended to both domestic and foreign investors.
5. Governments of fragile states should develop regulatory frameworks to support energy investments and commit to transparency and the rule of law.
Support from aid agencies to strengthen the capacity and role of state institutions and deepen local workforce capabilities in the energy sector will be needed.
6. Improve collection and availability of data on energy investments in fragile states.
This would enable tracking of commitments and support valuable research efforts to evaluate projects and inform policymaking.
Fragile states have never been at greater risk of falling behind the rest of the world. Nor have the global dangers of fragility – extreme poverty, mass migration, and terrorism – ever been more serious. Expanding energy access is essential to enable these states to escape fragility and achieve growth and development.
Council on State Fragility