Global investment in the energy transition reached a new high of USD 2.4 trillion in 2024, marking a 20 per cent increase compared to the average annual levels seen in 2022 and 2023. Around one-third of this total was directed toward renewable energy technologies, taking global renewable energy investment to USD 807 billion. While this reflects continued momentum, the pace of growth in renewable energy investment slowed notably during the year.
According to a new report jointly published by the International Renewable Energy Agency and the Climate Policy Initiative, renewable energy investments grew by 7.3 per cent in 2024 on a year-on-year basis, a sharp decline from the 32 per cent growth recorded the previous year. The report, titled Global Landscape of Energy Transition Finance 2025, was released ahead of the UN Climate Conference COP30 in Belém, Brazil. It is intended to support global climate finance discussions by tracking investment flows into renewable energy technologies and their supply chains, while also analysing regional trends, funding sources, and financial instruments.
The report shows that the power sector continues to dominate renewable energy investment, receiving 96 per cent of total renewable funding. Solar photovoltaic investment reached a new record of USD 554 billion in 2024, representing a significant increase of 49 per cent compared to the previous year. Overall investment in renewable power, electricity grids, and battery storage surpassed spending on fossil fuels during the year, although investment in fossil fuels is once again increasing.
Despite overall growth, the distribution of investment remains highly uneven. Around 90 per cent of global investment in energy transition technologies was concentrated in advanced economies and China, leaving emerging and developing countries with limited access to funding. IRENA’s Director-General, Francesco La Camera, noted that while investment levels are rising, they are still not sufficient to meet the global target of tripling renewable energy capacity by 2030. He stressed that renewable energy funding remains heavily concentrated in wealthier economies and highlighted the importance of scaling up finance for emerging and developing countries to ensure the energy transition is inclusive and global.
The report explains that advanced and major economies are largely able to finance their energy transitions using domestic financial resources. In contrast, lower-income countries face significant challenges due to underdeveloped financial markets, limited public finances, high capital costs, and growing debt vulnerabilities. These factors make them heavily dependent on external financial support.
Globally, nearly half of total energy transition investment in 2023 was provided in the form of debt, mostly at market rates, while the remainder came from equity investments. Grants made up less than one per cent of total funding. The report warns that the lack of affordable, impact-driven finance such as low-cost debt and grants, combined with the urgent need to mobilise capital, risks worsening debt pressures in developing countries.
Mr. La Camera further emphasized that public funding must be used more strategically to attract private investment through risk-reduction mechanisms. He cautioned that an overreliance on profit-driven private capital is leaving many developing countries behind, and where private finance is unwilling to invest, the public sector must take the lead with support from stronger multilateral and bilateral cooperation and increased climate finance.
The report also highlights that investment in energy transition supply chains and manufacturing remains essential but highly concentrated. Between 2018 and 2024, China accounted for 80 per cent of global investment in manufacturing facilities for solar, wind, battery, and hydrogen technologies. While this concentration raises concerns, the emergence of new manufacturing facilities outside advanced economies and China is a positive development, as it can strengthen energy security and deliver wider economic benefits to other developing regions.
Overall investment in factories producing solar, wind, battery, and hydrogen technologies fell by 21 per cent to USD 102 billion in 2024, largely due to a sharp decline in solar photovoltaic manufacturing investment. In contrast, investment in battery manufacturing nearly doubled to USD 74 billion, driven by growing demand for energy storage across power grids, electric vehicles, and data centres.
The report concludes that foreign direct investment, including joint ventures, technology partnerships, and knowledge-sharing initiatives, will be critical to expanding energy transition manufacturing in emerging and developing economies. This includes opportunities for greater South-South cooperation. It also stresses the need for strong policies to ensure that these investments are socially and environmentally responsible, and that the benefits of the energy transition are shared more fairly across regions and communities.
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