Development aid for energy in Small Island Developing States

Aaron Atteridge,Georgia Savvidou

doi:10.1186/s13705-019-0194-3

Aaron Atteridge, Georgia Savvidou

Open Access

https://doi.org/10.1186/s13705-019-0194-3

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Abstract

BackgroundEnergy is given high priority in the national development agendas of most Small Island Developing States (SIDS) because it is intertwined with social, economic and environmental challenges. Many SIDS experience heavy fiscal burdens associated with imported fuels, some have very low electricity access rates, and islands also have a strong interest in the transition to cleaner energy because they are particularly vulnerable to the impacts of climate change. This paper presents a global mapping of development finance for SIDS’ energy sectors. We analyse whether energy aid has increased following international commitments to support developing countries tackle climate change and whether this is supporting renewable energy, whether finance has been targeted to different recipient countries based on either their income status or their electricity access rates and whether electricity access rates have substantially improved during this time, and whether financial commitments are actually being disbursed.MethodsFocusing mainly on the period 2002–2016, we use data reported by bilateral and multilateral sources to the Organisation of Economic Cooperation and Development’s Development Assistance Committee on financial support to 37 SIDS. Our analysis includes almost 5700 energy-related transactions between 2002 and 2016. Data on populations and electricity access rates of individual countries come from the World Bank’s Open Data platform.ResultsWe observe an increase in funding since 2009 and a shift towards renewables, and solar particularly, though oil-fired plants and other non-renewables continue to be funded. Energy aid is unevenly spread between SIDS, on a total and a per capita basis. There is little correlation between the allocations made to individual countries and either their income or energy access gaps, and improvements in electricity access have been slow in those countries where the gap is largest. We also identify low disbursement rates, suggesting implementation problems.ConclusionsThere is an urgent need to improve the quantity and quality of aid to help SIDS tackle their significant energy challenges. While the trend towards more funding for renewables is positive, low disbursement levels and limited support for strengthening local human and institutional capacities may be limiting its effectiveness.

Highlights

Energy challenges in SIDS Among the many challenges that governments and communities in Small Island Developing States (SIDS) have to manage is access to, and the cost burdens of, energy
Using data reported to the Organisation for Economic Cooperation and Development (OECD) Development Assistance Committee (DAC) by countries, multilateral funds and development banks, we examine the following questions: whether volumes of finance for SIDS’ energy sectors have increased following United Nations Framework Convention on Climate Change (UNFCCC) commitments; whether aid is responding to the global energy transition needed to tackle climate change and to SIDS’ own emphasis of renewable energy; what financial instruments have been used to deliver this support; whether aid is targeting the most needy in terms of energy access gaps and, related, whether it has catalysed improvements in access rates; who is providing energy aid for SIDS; and, the ratio of disbursements of aid relative to commitments, as a proxy for identifying potential implementation challenges
Overall, this paper adds an updated and global view of what is happening in the energy aid space for SIDS

Summary

Introduction

Energy challenges in SIDS Among the many challenges that governments and communities in Small Island Developing States (SIDS) have to manage is access to, and the cost burdens of, energy. Most SIDS rely heavily on imported fossil fuels, mainly oil, for electricity generation and primary energy supply, as well as for transport [1], a situation that creates direct financial burdens, supply risks and indirect costs associated with climate change. The Samoa Pathway highlights access to affordable, modern energy services, renewable energy and energy efficiency as key elements of SIDS sustainable development strategies. These priorities mirror those of the Sustainable Development Goals (SDGs), SDG7, under the United Nations’ Agenda 2030 [9]. Many SIDS experience heavy fiscal burdens associated with imported fuels, some have very low electricity access rates, and islands have a strong interest in the transition to cleaner energy because they are vulnerable to the impacts of climate change. We analyse whether energy aid has increased following international commitments to support developing countries tackle climate change and whether this is supporting renewable energy, whether finance has been targeted to different recipient countries based on either their income status or their electricity access rates and whether electricity access rates have substantially improved during this time, and whether financial commitments are being disbursed

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