Vienna Energy Conference 2009
A sustainable, long-term solution to the world’s energy needs is a defining issue of our time. Energy lies at the core of the key global challenges of the 21st century – poverty, sustainable development, climate change and global, environmental and food security. Addressing global energy in a sound and sustainable manner will contribute to addressing these pressing challenges.
Today’s convergence of crises – economic slowdown and financial squeeze compounded by continuing volatile food and fuel prices – offers a unique opportunity to re-shape policies and re-direct investments towards a more secure and sustainable path to development. The Secretary General has called for a transition to a “green economy” to address the current crises and transform the way in which the world produces and uses energy. It is a call for countries to adopt low carbon paths in their development goals.
Energy Financing in Times of Crisis
The global economic and financial crisis could have a major impact on infrastructure financing in general and energy financing in particular. Some sources suggest that the financing for energy infrastructure will be severely affected – a view that is somewhat moderated by a more optimistic outlook from the renewable energy market. However, some shortfall in the financing for the energy sector could be expected.
For regions such as Africa, where the provision of electricity is by far the greatest infrastructure challenge, this is indeed bad news. Compared to other regions of the world, Sub-Saharan Africa has one of the lowest rates of energy access, capacity per capita and electricity consumption per year. But Africa will not be the only region affected. Immense investment requirements still exist in most developing countries to build additional generation capacity, extension of electricity grids in urban areas, mini-grids in medium-sized settlements, and decentralized installations providing energy services to remote and rural areas. Given the prominent role that foreign banks play in developing countries, scaling back on financing will likely decrease energy financing. According to the World Bank, private capital flows in the energy sector are also expected to decline.
On the other hand, the economies of the Asia-Pacific region, despite the financial crisis, will continue to have economic growth and high-energy demand. This, in turn, will have a deleterious effect on climate change. Widening access to energy services will continue to be a major challenge to the region along with addressing climate change. In Asia and the Pacific, a low carbon development path would effectively meet the region’s development needs while addressing the challenges of climate change and local pollution.