Onome Amuge
Global financial flows to developing countries for clean energy projects have risen to $21.57 billion, according to the newly released United Nations Framework Convention on Climate Change (UNFCCC) Yearbook of Global Climate Action 2025. But as the momentum builds, analysts warn that Nigeria risks capturing only a fraction of this capital inflow unless it strengthens its investment frameworks, improves energy policy execution, and aligns with emerging global financing models.
The UN report, titled Marrakech Partnership for Global Climate Action, shows that funding for clean energy in the developing world has nearly doubled from $12.14 billion in 2015 to $21.57 billion in 2024. This reflects rising investor confidence in renewable infrastructure across the Global South; from solar and wind to electrified transport and energy storage.
However, the UNFCCC cautioned that despite the positive trend, most of the funding remains concentrated in a few countries, exposing persistent disparities in access to climate finance and technology. “Financial flows to developing countries for clean energy reached USD 21.57 billion, up from USD 12.14 billion in 2015, but remain concentrated in a few countries. Universal access by 2030 requires not just technology deployment but equitable distribution of capital and capacity,”the report stated.
According to the UNFCCC, global investment priorities have undergone a significant transformation, as clean energy now receives ten times the capital channelled into fossil fuels, five times higher than in 2015.
“The headline achievement is the investment ratio reversal: clean energy to fossil fuel investment reached 10:1 in 2024. This demonstrates that renewables have transformed from subsidy-dependent to economically preferred,” the report stated.
Behind this shift are declining costs of renewable technologies, breakthroughs in battery storage, and growing institutional appetite for low-carbon assets. Solar and wind projects now dominate clean energy portfolios in emerging markets, increasingly supported by green bonds, blended finance, and sovereign sustainability issuances.
Transportation electrification has also become a defining trend. The UN agency cited strong momentum in e-mobility, particularly in Asia and Africa, where governments are moving to cut fuel imports and emissions. “Transportation electrification and urban low-carbon infrastructure are advancing,” the report noted.
While global investment in clean energy grows, Africa’s share remains minimal, hovering around 2 to 3 per cent of total flows. Countries like South Africa, Kenya, Egypt, and Morocco continue to attract the lion’s share of climate finance in Sub-Saharan Africa, owing to stronger policy consistency, bankable project pipelines, and established credit mechanisms.
Nigeria, despite being the continent’s largest economy and energy consumer, remains underrepresented in green capital inflows. Data from the African Development Bank (AfDB) show that Nigeria captures less than 5 per cent of Africa’s renewable energy investment annually, a gap experts say can only be bridged through policy certainty, grid reform, and credit enhancement mechanisms.
A $2.5 billion carbon finance opportunity
Analysts argue that Nigeria could unlock at least $2.5 billion in carbon market value by expanding its renewable capacity and certifiable emission-reduction projects. Such a move would strengthen fiscal buffers and reduce foreign exchange pressures linked to fuel imports.
The federal government has set a target of achieving universal electricity access by 2030 and net-zero emissions by 2060, but experts warn that implementation delays and fragmented policies are hindering progress.
According to analysts, Nigeria’s growing decentralised energy sector, particularly mini-grid developers, could become the bridge between energy access and climate goals.
Private investment is now driving over 70 per cent of global renewable energy financing, the UNFCCC report found. Development finance institutions (DFIs) increasingly play a catalytic role, offering risk guarantees and concessional funding that attract institutional investors such as pension funds and impact funds.
For Nigeria, analysts say mobilising domestic institutional capital, particularly from pension and insurance assets estimated at over N17 trillion, will be crucial to financing the energy transition.
The Lagos State government’s green bond issuance and the Sovereign Green Bond programme launched are seen as early examples of how subnationals can tap climate finance. However, analysts stress that scale and consistency are still lacking.
Bridging the energy divide
The UNFCCC report observed that access to electricity has improved across developing regions due to decentralised renewable systems, mini-grids, and off-grid solar solutions, bringing power to millions of previously unserved households. But the pace remains insufficient to meet the UN’s universal access target by 2030.
Nigeria, home to the world’s largest electricity-access deficit with over 85 million people off-grid, stands at a critical juncture. With grid instability and diesel dependence constraining growth, experts believe renewable decentralisation offers the fastest route to inclusive electrification.
Beyond investment attraction, Nigeria faces the deeper challenge of execution capacity, ensuring that existing clean energy policies translate into operational projects. Initiatives such as the Energy Transition Plan (ETP) and Renewable Energy Master Plan outline ambitious targets, but stakeholders say delivery remains slow due to regulatory bottlenecks, financing gaps, and weak coordination among agencies.
The UNFCCC report signals the end of the era of pilot projects and policy rhetoric. Global investment in renewables is tangible, deep, and accelerating. For Nigeria, the challenge is no longer the availability of clean energy finance; it is whether the country can establish the frameworks, build investor trust, and generate the momentum to secure its fair share.
