Energy for Sustainable Development - Annual Report 2013

According to the UN, the world’s population will reach almost 10 billion people by 2050. As result of economic growth and a growing population, we expect global energy demand to increase by 35 percent over the next twenty years.

Access to sustainable, affordable and reliable energy services is essential for both economic and social development. While many countries focus on domestic energy security and decarbonising their energy mix, many are also struggling to secure sufficient energy to meet basic human needs. At present more than 1.2 billion people lack access to electricity at home and 2.8 billion have to rely on wood or other biomass to cook and heat their homes.

In developing countries access to affordable and reliable energy services is important to reduce poverty. It is necessary to stimulate economic activity like operating businesses and creating employment. Likewise, access to energy is necessary to provide social services like modern health clinics with refrigeration of medicines and schools with sufficient lighting. In addition, energy for the individual households is important, with lighting allowing children to study at night and improved cookstoves which can contribute to significant health improvements. This is why increased access to modern energy services is one of the prioritised areas of Norwegian development funding.

The world’s energy use is mainly based on fossil fuels. In order to mitigate the effects of climate change the world’s dependence on fossil energy must be reduced. The poorest countries with low energy production and consumption are not major contributors to climate change, but will suffer disproportionately from its impacts at the local level. Support to increased renewable energy production has therefore been high on the Norwegian development agenda.

Since the launch of the United Nations (UN) Secretary General’s Sustainable Energy for All (SE4All) initiative, the importance of sustainable energy access for development has received a surge of international attention. The Government of Norway has been an active supporter of the initiative and in 2014 UN launched the decade for SE4All.

Available public funds are insufficient to meet the large investment needs of developing country’s energy sectors. Mobilising private capital is therefore a key priority. Norway’s main instrument to mobilise commercial investments in developing countries is Norfund. The renewable energy portfolio constitutes about half of Norfund’s total investments.