Energy access and fuel poverty
This page is part of the E3G Public Bank Climate Tracker Matrix, our tool to help you assess the Paris alignment of public banks, MDBs and DFIs.
This section looks at five different elements of energy access:
- Energy access target: This focuses specifically on a measurable target that goes beyond and is more quantitative than a broad commitment towards energy access.
- Minimum standard definition for energy access: The UN and World Bank initiated the Sustainable Energy for All initiative (SEforAll), which has now become an independent international organisation. This initiative developed the Multi-Tier Framework for measuring energy access and proposed benchmarks which can be used to measure the progress towards the SDG7 goal and the quantity and quality of the energy supply. The tiers or levels cover household electricity supply, household electricity services, energy consumption, cooking solutions and space heating. The tiers also cover capacity, duration, quality, affordability, reliability, indoor air quality and safety. Public banks should use this framework when defining energy access.
- Percentage of energy finance to energy access: Updated percentages on energy access are sourced per MDB from the Oil Change International’s Short-changing Energy Access report, where available. The previous percentage is based on data from a 2016 report by Sierra Club and Oil Change International on assessing the MDBs on their financing towards energy access between 2012-2014. Clarification on whether there are any more up to date sources for this type of data would be welcome, as our research has not identified any.
- Progress monitoring: This was assessed by the granularity of the monitoring and the attribution of the monitoring to a specific bank’s activities.
- Progress metrics: The banks reported against their own targets and this data was used to assess their progress. Where possible we also use reports issued by internal independent evaluation departments.
The ‘Paris-Aligned’ category required a comprehensive strategy and good progress, while ‘Transformational’ required measuring equity balance (how much energy access finance and technical assistance targets the poorest). Institutions were assessed against this indicator where relevant.
Evolution of this indicator
Limited applicability meant this indicator could not be assessed across all institutions. The European institutions (EIB and EBRD) do not have a strong focus on energy access, and therefore EIB was assessed largely on it’s work outside the EU, while EBRD was not assessed. Further research could explore the potential for additional data sources to complement the existing assessment.
E3G will also consider expanding this indicator in the area of fuel poverty.
Over 1 billion people lack access to electricity and over 3 billion lack access to clean cooking. Closing this gap to zero by 2030 is a key target for Goal 7 of the SDGs. To achieve this target, a significant shift in global finance will need to occur, including from the MDBs.
As much as 84% of the global population who are without access to electricity live in rural areas. Due to the remoteness of many of these areas, grid connections are often costly and are only viable in certain regions. Decentralised energy systems such as off grid renewable energy and mini grids provide a way of supplying electricity to these areas that are more remote. These systems also provide a multitude of co-benefits, including reduced indoor air pollution and shorter construction time. Additionally, in some country contexts, solar and small-scale hydro is more cost effective than grid electricity or diesel. Off grid solar can be the most viable method for providing access to electricity in rural areas because a top down approach to the grid can be complemented by a demand led approach.
Furthermore, the 48 countries in the Climate Vulnerable Forum have issued a call to strive for 100% renewable energy by 2050 while working to end energy poverty. This sets out a strong and ambitious goal for sustainable energy access which public banks should support.
The definition of fuel or energy poverty refers to not only to inadequate access to lighting and electric appliances but also inadequate access to ‘modern’ fuels for cooking and space heating. More detail on this is available in the Sustainable Energy for All Multi-Tier Framework mentioned above.