The triple threat of the climate crisis, COVID-19 pandemic and deepening inequality demands urgent, bold responses, from all sectors of society. However, if the just-ended COP26 is any indicator, that sense of urgency and boldness is still a long way from view. An ever-growing chorus of movements, scientists, government officials, journalists and faith leaders are shining a harsh light on the failures of governments, both North and South, donor agencies and the private sector to meaningfully improve livelihoods. The rallying calls among poor and excluded peoples, indigenous movements, people of colour, young people and feminist movements are climate justice and a just transition.
Sustainable development depends on access to energy required to power aspects of our lives, from homes, to schools, to healthcare centres, as well as industries and other productive activities. This dependency was best-illustrated in 2015, when the international community enshrined in Sustainable Development Goal 7 (SDG7) its ambition to achieve access to affordable, reliable, sustainable and modern energy for all by 2030. The benefits of energy access are economic, social and environmental in nature, and promise substantial return on investment measured in economic, quality of life and climate terms.
It is a profound indictment of the status quo that in 2019 some 759 million people, globally, lived without access to electricity and 2.6 billion without access to clean fuels and technology for cooking. These figures have likely increased due to COVID-19. The reality of energy poverty is starker when viewed through a gender lens. Many women and girls spend a disproportionate amount of their day, for example, looking for firewood, cooking over smoky woodfires, and performing day-to-day activities such as threshing grain, grinding peanut butter or pounding yams using their hands. Lack of these energy services, so critical to addressing poverty and improving livelihoods, can be contrasted – for example – with trillionaire CEOs’ conquests of space as a public symbol of massive income inequality. Based on current stated policies, the International Energy Agency (IEA) estimates that some 670 million people will remain without electricity and 2.1 billion people – 28% of the projected global population – without clean cooking fuels in 2030. Put simply, in the absence of decisive action the global community will miss its own SDG7 universal energy access targets by a wide margin.
It is within the nexus of sustainable development, climate justice and gender equality that we must examine whether enough is being done to support women who live on the frontlines of these challenges and yet whose needs and rights are often excluded. There is growing recognition of the need for more and better targeted investment in clean, decentralized energy solutions to meet the needs of those currently without even the most basic levels of energy access. Despite some shifts in rhetoric, however, finance for energy projects in the Global South have tended towards top-down solutions and large-scale infrastructure coordinated by global and national elites. Hence, energy services repeatedly fail to reach the last mile or significantly address energy poverty.
While it is positive to see new attention to gender equality in climate and energy access conversations, the focus tends to be on increasing the numbers of a tiny group of professional women in decision-making. Unfortunately, this angle fails to include the needs and rights of the vast majority of poor and excluded women with unmet development needs. These are the women who carry the burdens of whole communities on their backs. Thus, lack of attention to women’s rights and an over-emphasis on their roles together undermine the effectiveness of potential solutions.
Amid the exciting promise of greater investment in renewables as the underlying technologies continue their march down the cost curve and drive an accelerated energy transition, large questions remain, especially in the Global South. Will the money materialize? Where will it go? More importantly, will it reach women in last mile communities and meet their practical and strategic needs? But before we get to the ‘new’ money, we need to examine the current energy finance landscape.
Despite concerted efforts from some leading donors and financial institutions, finance available to address energy access and transition challenges remains far below the levels of investment needed to achieve SDG7 targets. Research by Sustainable Energy for All (SEforALL) and the Climate Policy Initiative (CPI) shows that finance commitments for residential electricity access in twenty countries (home to more than 80 percent of people globally without access) equate to around one third of the USD35 billion the IEA estimates is required annually to achieve universal electrification by 2030. To give a concrete example, six African countries with the very lowest electricity access rates received, in aggregate, just USD933 million in financing commitments in 2019 across a combined population of approximately 181 million people without access.
Decentralized electricity solutions can be critical to providing, at lowest first cost, the basic levels – or tiers – of access that can be transformational for low-income and rural populations. Yet, in 2019 only USD294 million was identified as committed to off-grid and mini-grid electricity solutions, which predominantly deliver basic levels of access, in twenty countries globally with the lowest access rates. This represents less than 1% of all finance that SEforALL and CPI tracked to electricity in those countries. Investment in clean fuels and technology for cooking is even further off track. Finance commitments for clean cooking solutions in twenty countries that represent the lion’s share of the clean cooking access challenge have languished around USD130 million annually between 2015 and 2019. Comparing this to the USD8 billion the IEA estimates is required annually until 2030 to achieve universal access should sharpen our collective focus. The perennial underinvestment in clean cooking solutions simply compounds the negative health, climate and gender impacts caused by traditional cooking methods.
The volume of development finance for energy projects that explicitly target women is very low. In 2019, development finance for projects with a Principal or Significant gender equality marker amounted to 13% of development finance for all energy projects. This is far below the average proportion for development finance across all sectors (25% in 2019) and represents slow progress towards increased integration of gender equality in energy sector projects. The supply-side problem is exacerbated by the very serious challenges women face in accessing finance. For example, women entrepreneurs seeking finance to scale their businesses often encounter: high interest rates, cumbersome loan application procedures and collateral requirements, discriminatory social norms and unequal laws. Put simply, the financing bar in much of the Global South is often higher for women.
Of course, committed finance can only have an impact on the ground if it is disbursed quickly and efficiently. In this regard, it is sobering that large volumes of planned investment and funding support are delayed or face multiple barriers, thereby depriving vulnerable populations of basic energy access. SEforALL and South Pole found that in twenty countries with the largest energy access deficits, 58 percent of planned disbursements to the energy sector and 49 percent of projects were delayed across the period 2002-2018. The multiple reasons for these delays include poor initial project planning, a mismatch between the types of finance provided and the risk profiles of the projects to which it is committed, and often poor institutional delivery capacity.
We need to change course fast. Economic recovery from COVID-19, the Paris Agreement and the SDGs are at stake. Public and philanthropic capital have key roles to play, especially in helping to mobilise private capital at scale through, for example, judicious blended finance structures. Well targeted public finance is especially critical in the context of heightened risks in developing countries, where it remains key to cover early-stage project development risks, to address actual and perceived barriers to the deployment of private capital and to bring nascent markets to maturity. To address chronic disbursement delays in committed finance, donors, recipient country governments and project owners must critically examine the reasons for delays and make immediate changes to improve translation of well-intentioned energy project plans to impact on the ground.
A call for different approaches and ways of working
Here we offer a few solutions.
Increase the quantum and type of financial resources
No single source or type of finance can meet the huge demand for sustainable energy at the last-mile. There is need to blend different types of finance and adopt innovative financing structures that make best use of public, private and philanthropic capital. Solutions could, for example, include an expansion of concessional finance to manage risk and encourage greater participation of private capital; new co-financing structures that leverage the experience of international financiers while tapping into local financial institutions’ expertise and networks; and improved access to carbon credits through government schemes that capture carbon proceeds and apply them to expand clean fuels for cooking. There is also much scope to explore financial instruments and policies that specifically target women and recognize the additional – often unique – legal and cultural barriers they face in accessing finance.
A key consideration in the blending is that there must be alignment of VALUES and principles. At the Shine Campaign, we have worked with a wide range of investors that are rethinking the standard profit measure and are looking to creatively mobilize different types of funding to address the multiple crises unfolding. Shine’s constituency includes philanthropies, impact investors, faith-based investors as well as institutions committed to investing through a gender lens.
Reframe the conversation
Energy access is an enabler, not an end in itself: Women and last-mile communities are unlikely to name ‘energy access’ of itself as their priority need given the urgency of basic survival. People experience poverty and exclusion as a web of political, economic and social issues that must be resolved together to improve lives, wellbeing and self-determination, while energy solutions are often compartmentalized. Time poverty, precarity, food and physical insecurity are all interconnected. Intersectional approaches that take into account the diversity of women’s identities and needs based on multiple markers of exclusion and discrimination – sexual orientation, age, location, disabilities, indigeneity, race, and class, to name a few – are called for.
Similarly, national energy plans that take an integrated approach, combining both electricity and cooking solutions as well as grid and off-grid approaches, and leveraging renewable energy technologies, will be key to accelerate sustainable energy access. Connecting this planning with a country’s climate strategies could help achieve both climate and energy access targets – a win-win for people and the planet. Of course, in creating integrated energy plans, actively listening to end-users to ensure that proffered solutions align with needs is arguably most important of all.
Rethink and redesign what impact and outcomes look like
A reframed approach must lead us to rethink and redesign monitoring and evaluation approaches. So, for example, women could identify their priority need as a well-functioning health-clinic to meet their sexual and reproductive health (SRHR) needs. Evaluating the impact and outcomes must show both quantitative and qualitative shifts in SRHR. Women must participate in the definition of indicators and the monitoring thereof.
While SDG7 does not include an explicit gender equality target, good energy service is inextricably linked to the achievement of SDG5: gender equality. However, inconsistent definitions of “gender equality” and adoption of different gender targets in donor and government reporting limit the accurate quantification of development finance for energy projects that target women and girls. This, in turn, leads to ineffective planning and inconclusive financial reform efforts critical to tackling gender inequality in energy access. Clearly defining and measuring the volume of finance committed to energy projects with gender equality objectives can help us better measure the impact of these projects. One initiative that seeks to improve the availability and quality of mechanisms, tools, and sex-disaggregated data relating to women and energy is the 2021 Gender and Energy Compact under the auspices of UN Energy. The Compact brings together a coalition of governments, private sector, academia, civil society, youth, and international organizations to catalyze action towards a common objective: to promote a just and inclusive, and gender responsive energy transition.
Locally-defined and led strategies
Women end-users and their communities’ participation throughout the programme or policy development and implementation cycle should be a fundamental principle guiding any energy sector intervention. Financiers should intentionally and consistently ensure that women and girls who live the day-to-day reality of energy poverty are at the decision-making tables or, even more appropriately, sitting under that tree! The energy sector could learn some vital lessons from current efforts to localize and shift power to those who directly experience energy poverty.
Work with women’s movements and organisations
For many decades, women’s movements and organisations have led struggles on issues that affect them. They have organised from village to global levels. They have also shaped most of what many governments, donor agencies and other social justice movements now seek to scale-up. It is imperative that any (new), player intending to contribute to the enlarged gender+climate+development ecosphere work with these movements. They have the expertise and the practical tools to engage women. More importantly, most have established credibility and deep relationships with women in last-mile communities that can be leveraged for greater impact. At the same time, support should go to the wider women’s movements to strengthen integration of energy access into their current programmes and agendas.
It is often said that SDG7 is an enabler of all the other SDGs, including SDG5. With only a few years left to achieve the international community’s ambitions for sustainable development, every actor within the energy and finance sectors, as well as the development, humanitarian and climate-justice communities, must redouble its efforts to ensure that women and girls are front of mind in the pursuit of sustainable energy for all.