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

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ELECTR-5744; No of Pages 26Table 2: Overview of GFCF for Electricity and Gas Distribution (USD billion) [constant 2000 prices].2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 aOECD 179.1 183.0 175.1 174.3 168.3 173.3 191.8 211.6 222.7 172.2Non-OECD b 53.5 58.3 60.1 71.2 77.0 84.8 98.1 123.4 153.4 144.5LDC 1.3 1.4 1.6 1.6 1.7 1.9 2.0 2.3 2.5 2.6Global 232.6 241.3 235.2 245.5 245.3 258.1 289.9 335.0 376.1 316.6a Incomplete; the sharp decrease is due to the economic crisis as well as to the fact that the dataset is incomplete at the date of writing.b This row includes the LDC figures.exception of 2009 (Table 2). At theregional level, the trends aresimilar, although not quite asclear-cut. GFCF for electricity andgas distribution in the OECD wasstagnant or decreasing between2000 and 2005, before picking upsharply. In the LDCs, GFCF inelectricity and gas distributionhas doubled in a decade, althoughthe absolute value remains low.B y way of comparison, IEA(2003) estimated the worldinvestment in electricity and gas 26in 2000 at USD 315 billion.UNFCCC (2007) estimated, basedon UNCTAD and OECD data, theinvestment in electricity and gasdistribution reaching USD 216billion in 2000. Eberhard et al.(2011) also provide very usefulanalysis on investment in 24countries of sub-Saharan Africa(SSA). 27Figure 2 shows the relativeevolution in energy-related GFCFin selected 28 developing countries.The country datasets arenormalized in 2000 to reveal thetrends in the recent years. Thecurves for Namibia and, to a lesserextent, Armenia, urge for cautionin interpreting the data, since theflows are subject to significantfluctuations, particularly if theyare relatively small in absoluteterms. Also, wide variations urgefor caution in the interpretation ofthe datasets.T his notwithstanding, theanalysis indicates a clearpositive trend overall. That beingnoted, the rate of increase variesgreatly between the countries(+60 percent and +160 percent forBotswana and India, respectively,over 10 years). Interestingly, thetrend is in some cases negative, asFigure 2: Relative Trends in Energy-Related GFCF in Selected Developing Countries [constant 2000 USD]6 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
ELECTR-5744; No of Pages 26in the instance of Niger.Noteworthy is also the case ofSouth Africa, where energyrelatedGFCF increasedexponentially in recent years.Incidentally, South Africa is oneof the often-quoted success storieswith regard to rapidly increasingthe rate of access to electricity.B. Foreign Direct InvestmentElectricity, gas, and waterrepresents one of 15 sub-sectors inFDI data sets, including, inter alia,financial intermediation; paperand paper products; food,beverage, and tobacco. As noted,because of the difficulty in therobustness of the FDI data sets,we do not present a time-series ofaggregated figures. However, asan example, we estimated thetotal 2000 flows to be 30 USDbillion. 29 Foreign directinvestment grew steadily fordeveloped and developingeconomies over recent years untilthe global financial crisis of 2008.The effect of the crisis on FDI wasevident in 2009, and was morepronounced in richer nations thanfor developing economies. Abouthalf of global FDI inflows now goto developing countries andtransition economies (UNCTAD,2010). While the overall trends forFDI inflows in LDCs have been onthe rise for the last decade(UNCTAD, 2011), our analysisshows a downward tendency forenergy-related 30 FDI inflows inthose countries (see Figure 3 forseveral examples).P roviding insights on trendsby region over time ischallenging given the datapaucity; no clear pattern can bederived from an analysis acrossdeveloping countries, as theenergy-related FDI inflows varywidely between the years. Indeed,the flows have little ‘‘inertia’’ andare strongly influenced byindividual projects.C. Official DevelopmentFinanceAid for energy has been part ofbilateral and multilateral aideffort for many years. Its level wasrelatively constant in the 1980sbefore decreasing deeply thefollowing decade and reaching aminimum around the year 2000; ithas been on the rise again since(Figure 4). For the years 2000–08,the categories that received thebulk of the energy relateddevelopment finance were EnergyPolicy 31 (35 percent), followed byElectrical Transmission(26 percent), and Non-RenewableEnergy (17 percent).Figure 3: Energy-Related (plain lines) and Total (doted lines) Inward FDI Flows for Selected LDC Countries [constant 2000 USD]Aug./Sep. 2011, Vol. 24, Issue 7 1040-6190/$–see front matter # 2011 Elsevier Inc. All rights reserved., doi:/10.1016/j.tej.2011.07.006 7Please 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
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