Green Finance Engagement Team
The renewable energy sector is growing at an unprecedented pace as the world races to meet climate targets.
Renewable power generation reached a historic milestone, providing 32% of global electricity in 2024. Investments in renewable energy also hit a record US$728 billion last year, driving global investments in the low-carbon energy transition to surpass the US$2 trillion threshold for the first time in 2024, according to BloombergNEF’s Energy Transition Investment Trends 2025 report.
However, a significant financing gap remains, particularly in emerging markets where only one-fifth of global clean energy investments is currently taking place. The global share of renewable energy will also need to nearly double by 2030 to achieve net-zero emissions by mid-century.
The third instalment in our series explores how green finance is driving the deployment of renewable energy and examines the challenges that lie ahead.
The Renewable Energy Revolution
According to the International Energy Agency (IEA) Renewables 2024 report, renewable energy needs to provide nearly 60% of global electricity generation by 2030 in the Net Zero Emissions (NZE) scenario. Renewable power generation provided a record 32% of global electricity last year, according to energy think tank Ember’s Global Electricity Review 2025.
Global renewable power generation capacity is projected to grow 2.3 times by 2030, adding around 5,500 gigawatts (GW) of new capacity, according to the IEA’s World Energy Outlook 2024. Solar photovoltaic (PV) and wind power is expected to dominate this growth, accounting for 95% of all renewable capacity growth through the end of this decade.
Annual clean energy investment will also need to more than double to US$4.5 trillion by the early 2030s to align with climate goals. Moreover, for every dollar spent on renewable power, only 60 cents are spent on grids and storage. Investments in grids and storage is expected to reach parity with that in renewable generation by the 2040s, creating a balanced and resilient energy system, according to the IEA.
How Green Finance is Driving Renewable Energy Deployment
Green finance has been accelerating the adoption of renewable energy through several key mechanisms.
Equity and debt issuances for climate and energy transition purposes totaled US$1 trillion in 2024, providing crucial capital for renewable energy projects worldwide, according to BloombergNEF.
Blended finance, which uses funding from public and philanthropic sources to mobilise additional private sector investment, has also achieved notable success in Sub-Saharan Africa, attracting 61% of global concessional financing in 2020, according to The State of Blended Finance 2021 report by Convergence.
The Daybreak project in Nigeria shows how blended finance helped provide distributed renewable energy solutions as an alternative to diesel generators for commercial and industrial customers, in a nation with an unreliable grid supply and frequent blackouts. The International Finance Corporation (IFC) provided US$20 million equivalent in financing to Daybreak in 2021, enabling Nigeria’s second largest provider of commercial solar hybrid power to increase its solar photovoltaic capacity fourfold, helping to catalyse the nation’s distributed renewable energy sector.
The Cost of Delay
Failing to scale renewable energy deployment would have severe consequences:
- Missing climate targets becomes virtually certain
- Energy security risks increase, particularly in the context of ongoing geopolitical tensions
- Economic opportunities in the clean energy economy are lost
The IEA’s 2024 World Energy Outlook emphasises that while global carbon dioxide emissions are projected to peak before 2030, without a sharp decline afterwards, the world is on course for a rise of 2.4°C in global average temperatures by 2100, well above the Paris Agreement goal of limiting global warming to 1.5°C.
Green finance provides the tools to accelerate deployment and ensure these consequences are avoided.
Key Takeaways
- Renewable energy must scale rapidly to meet climate goals, with capacity projected to grow 2.3 times by 2030
- Green finance innovations are crucial for accelerating deployment, with blended finance showing particular promise in emerging markets
- The imbalance between investments in renewable energy generation versus grids and storage persists, but must be corrected to ensure system resilience
Looking Ahead
The transformation of our energy system depends on successfully scaling renewable energy deployment. As highlighted in our previous posts on financing the energy transition and regional investment disparities, green financing mechanisms are proving their effectiveness in mobilising capital for clean energy. In the next post, we’ll examine how green finance is supporting the critical infrastructure needed to integrate renewables, including transmission, storage, and smart grid technologies.
Stay tuned as we continue to explore how green finance is powering the clean energy revolution.
