Informing the Financing of Universal Energy Access: An Assessment ...

ELECTR-5744; No of Pages 26average over the time periodbetween 2011and 2030 of USD 11.6 billionfor LDCs compared to thetotal estimated flow of USD 2.5billion in 2008, a gap thatis similar to other recentestimates. 36 It must be notedthat estimations of this gapwould increase significantlyif one were to include energyneeds that go beyond householdpoverty alleviation (or thatassume significantly higherper capita consumption overtime).F inally, considering data oninternational financial flowsand comparing them withestimated requirements foruniversal energy access,implicitly suggests thatsignificant funding for energyaccess will need to be sourcedinternationally. Traditionally, thebulk of investment for a country’spower infrastructure has comemainly from domestic sources.Thus, new approaches will berequired.VI. Further WorkEfficient strategies to overcomeenergy poverty in the near futurewill require the carefulconsideration of the financialvehicles needed both in terms ofthe actual mechanisms andassociated institutions. Both areasalso require significant capacitydevelopment as a foundation.We briefly describe areas forpossible further work in thoseareas. Refining the analysis: There issignificant scope for refining ouranalysis. Notably, assessingdynamic aspects could providevaluable insights of policyrelevance. Also, the paucity of thedata represents a significanthindrance – especially in relationto providing insights about therelationship between macrofinancial flows and energy accessissues. Therefore, improving theinformation base, both in terms ofquantity and quality of the data, iscrucial. Delivery mechanisms: Thisarticle demonstrates that the gapbetween current and requiredflows is enormous in severalcases. Securing politicalcommitment and putting in placeeffective policy and regulatoryframeworks are crucial elementsto improve the investment climatefor energy access. These includepolicies that are technology- orsector-specific, remove existingmarket distortions (e.g., fossil fuelsubsidies), and work acrosssectors (education, health, water,agriculture, industry), as well asfinancing mechanisms to increasefunding along the projectspectrum (e.g., pre-feasibilitystudies, feasibility studies, seedcapital, debt, equity, andinsurance). There is a growingliterature in this area, such as:UNDP, 2009; UN-Energy/Africa,undated; Kammen and Kirubi,2008; Prasad, 2008; Moner-Girona, 2009; Solano-Peralta et al.,2009; Williams and Ghanadan,2006; DB, 2010; Arc Finance, 2009;Bloomberg New Energy Finance,2010; Laan et al., 2010; MacLeanand Siegel, 2007; Morris et al.,2007; Practical Action, undated;SELCO, undated. Actors and institutionalmapping: Financial flows for theenergy sector are of various types,origin and destination, and varyfrom multi-million dollarprojects for large infrastructureto the few dollars necessaryfor an improved cookstove or fora solar panel. Significantexperience has been gatheredfrom decades of successfuland less successful initiativesto address energy povertyat various levels. The lessonsshould be distilled and fedinto new strategies. Theliterature reports on someof those issues (e.g., Casillasand Kammen, 2010; Howells et al.,2010; Morris and Kirubi, 2009). Sources of financing: Theadditional financial resourcesrequired to achieve goalslike that of universal energyaccess will stem from varioussources. A useful area offurther investigation wouldbe to improve the understandingrelated to the share of12 1040-6190/$–see front matter # 2011 Elsevier Inc. All rights reserved., doi:/10.1016/j.tej.2011.07.006 The Electricity JournalPlease cite this article in press as: Bazilian M, have surnames. Informing the Financing of Universal Energy Access: An Assessment of Current Financial FlowsElectr. J. (2011), doi:10.1016/j.tej.2011.07.006