Abu dhabi: Global investments in the energy transition reached a record $2.4 trillion in 2024, marking a 20% increase from the average annual levels of 2022/23. Approximately one-third of this amount was directed towards renewable energy technologies, pushing renewable energy investment to $807 billion.
According to Emirates News Agency, despite this milestone, the year-on-year growth of renewables slowed significantly, with annual investments increasing by 7.3% in 2024, compared to 32% the previous year. This information is detailed in a new report by the International Renewable Energy Agency (IRENA) and the Climate Policy Initiative (CPI). The report, titled "Global Landscape of Energy Transition Finance 2025," was released ahead of the UN Climate Conference COP30 in Bel©m, Brazil, and aims to inform the global finance dialogue by tracking investments in renewable energy technologies and their supply chains.
Key findings from the report indicate that 96% of renewable energy investments were directed towards the power sector, continuing a long-standing trend. Global investment in solar PV hit a record $554 billion in 2024, up by 49%. Furthermore, investment in renewable power, grids, and battery storage exceeded fossil fuels investment in 2024, although fossil fuel spending is on the rise. Notably, investment in energy transition technologies grew globally, but 90% remained concentrated in advanced economies and China, leaving emerging and developing countries behind.
Francesco La Camera, Director-General of IRENA, emphasized the need for scaling finance for emerging and developing countries to make the transition truly inclusive and global. He noted that while investments in energy transition continue to grow, they are not at the pace needed to achieve the global goal of tripling renewable capacity by 2030.
The report highlights that advanced and major economies can draw on domestic financial resources to fund energy transitions. Conversely, lower-income countries rely on external support due to underdeveloped financial markets, limited fiscal capacity, high capital costs, and debt vulnerabilities.
Globally, nearly half of total investment in 2023 was provided as debt, most of it at market rates, while the rest was invested through equity. Grants accounted for less than 1%. The report underscores the urgent need to mobilize investments and warns that a scarcity of impact-driven capital, such as low-cost debt and grants, risks exacerbating debt burdens.
Francesco La Camera further stated that IRENA has long advocated for smarter use of public funds to unlock private investment through risk-mitigation tools. He stressed the importance of the public sector leading where private finance will not flow, backed by stronger multilateral and bilateral cooperation and scaled-up climate finance.
The report also reveals that investment in energy transition supply chains and manufacturing remains critical but highly concentrated. China accounts for 80% of global investment in manufacturing facilities for solar, wind, battery, and hydrogen technologies between 2018 and 2024. Positively, new factories are emerging outside advanced economies and China, expanding the energy security and socio-economic benefits of the transition to other developing economies.
Overall, global investment in factories producing solar, wind, battery, and hydrogen fell by 21% to USD 102 billion in 2024, driven by a significant drop in investments for solar PV manufacturing. In contrast, battery factory investment nearly doubled to USD 74 billion, reflecting rising demand for storage in grids, electric vehicles (EVs), and data centers.
The report underscores the importance of foreign direct investment through joint ventures, technology partnerships, and knowledge sharing to strengthen international cooperation and expand energy transition manufacturing in emerging and developing economies, including through South-South collaboration. Additionally, dedicated policies are needed to ensure these activities are undertaken in a socially and environmentally sustainable manner, with benefits shared equitably.