Financing energy access and off-grid electrification: A review of status, options and challenges

This paper provides a review of funding needs and financing mechanisms for energy access in general and off-grid electrification in particular to find whether the funding for these activities has been adequate, whether sufficient funding is likely to be available to meet the needs of universal energy access, whether innovative approaches can be used in funding. It finds that in all successful cases the state has played an important role in funding infrastructure investments but many developing countries have neglected the energy access issue for a long time. International donor agencies have provided selective and limited support, while the innovative mechanisms are also unfriendly towards small-scale projects. Weak governance, limited organisational capacity and unfavourable policy environment militate against large-scale mobilisation of financial resources in the poorest countries of the world where energy access is a chronic problem. The challenge of mobilising finance and ensuring its appropriate delivery and use remains a major issue and would require a co-ordinated effort of all relevant stakeholders.