From Potential to Reality: Accelerating Renewable Energy in the Global South

For many countries in the Global South, the energy transition is not simply about replacing fossil fuels; it is also about securing reliable electricity access, building climate resilience, and unlocking investment in renewable energy. Although clean energy investment has reached record levels worldwide, less than 15% flows into developing economies (excluding China). I-REC(E)s can play an important role in bridging this gap – which is critical to achieving both climate and development goals.

The IEA predicts 2025 will see a record $2.2 trillion invested in clean energy and decarbonisation – the majority concentrated in the Global North. Disruptions, from geopolitics and elsewhere, are slowing, rather than halting a seemingly unstoppable energy transition across developed nations.

Several European countries, including Sweden, Finland, and Denmark, run on high percentages of renewable energy. Solar overtook coal in Europe’s energy mix for the first time in June 2025 and the US saw more solar capacity added than any other energy source in 2024. Mega brands like Apple, Microsoft, and Meta have pledged to shift to 100% renewable energy within the next 5-15 years.

Alongside green energy’s increasingly competitive prices, flagship climate legislation from the UK, EU, Japan, and elsewhere, is also accelerating change. The IEA found policies like feed-in tariffs, tax incentives, and renewable energy mandates have been particularly impactful.

Unlike the Global North, energy transitions in developing nations are sometimes not a question of decarbonising existing grids but of building infrastructure from scratch. Around 570 million people in sub-Saharan Africa live without reliable electricity, suffering detrimental health, social, and economic outcomes as a result. Climate change also disproportionately impacts Global South regions. A recent ODI study found 53 developing nations have lost $395bn collectively due to extreme weather since 2000 – $156bn of which was directly attributable to climate change.

The ideal solution is to bypass reliance on fossil fuels where possible, moving directly to green energy sources. Beyond the environmental case, sources like solar and wind are more scalable and cost effective – particularly for rural communities not connected to the grid. Smaller decentralised energy systems are also more resilient against the storms and floods occurring with growing frequency and intensity due to climate change. Global South regions also often hold tremendous capacity for green energy development in areas like solar, wind, and hydropower. Africa, in particular, has the potential to become a global leader in renewable energy, due to its exceptional natural resources. 

The central barrier to making this happen comes down, once again, to funding.

The annual investment needed for the Global South’s green transition (excluding China) is estimated at somewhere between $2.2 trillion and $2.8 trillion per year by the early 2030s. Achieving all Sustainable Development Goals (SDGs) could require an additional $4 trillion annually by 2030. 

The IEA estimates around 60% of funding for the Global South’s clean energy transition will need to come from the private sector by the early 2030s. At present, Global South nations (excluding China) receive less than 15% of clean energy investment, according to the IEA and the World Economic Forum. Africa receives just 2%. 

Perceived risks, like political instability and currency exchange uncertainty in certain markets, create higher interest rates and equity returns. As the IEA’s Cost of Capital Observatory demonstrates, clean energy projects can cost 2-3 times more in Global South nations, making them less attractive to private investors.

I-REC(E)s are creating new revenue streams for green energy projects across the Global South. Thailand, Malaysia, and the UAE have all incorporated the certification directly into their transition plans via legislation, supporting flagship renewables projects and – in Malaysia’s case – a national green tariff. 

Based on I-TRACK’s rigorous international standards, each I-REC(E) certificate represents the environmental attributes of one megawatt-hour (MWh) of renewable electricity generated and added to a grid from registered facilities. Companies, governments, and individuals can purchase and redeem these certificates to claim this environmental benefit and reduce their Scope 2 emissions.

I-REC(E) is recognised by leading sustainability reporting frameworks, including the Greenhouse Gas Protocol, RE100, and ISO standards. This creates an extra layer of security, making projects more attractive to foreign investors.

The certification galvanises funding for locally owned facilities, enabling communities to benefit directly from their own natural resources. This positive social impact goes further with D-RECs and P-RECs – essentially, I-REC(E)s with an additional impact label.

D-RECs, or Distributed Renewable Energy Certificates, help fund small-scale renewable facilities, like mini-grids, in lower income communities. P-RECs, or Peace Renewable Energy Credits, support projects in regions characterised by conflict risk, instability, and energy poverty. This is especially important as climate change is a known stressor that can exacerbate these conditions.

Kenya is a living example of a developing nation successfully leapfrogging fossil fuels to capitalise on its green energy potential. It is Africa’s largest, and the world’s sixth largest, geothermal energy producer, with the world’s largest and most mature off-grid solar market. Over 90% of Kenya’s electricity came from renewables in 2024, placing it firmly on track to reach its goals of 100% clean and universal energy access by 2030 – addressing climate change and energy poverty simultaneously.

I-REC(E) is helping growing numbers of Kenya’s green energy projects become more financially viable.

For example, the Kesses 1 Solar Farm, registered with GCC in January 2025, generates 123,000 MWh clean electricity each year – enough to power 245,000 households. Projects like this support climate goals, promote energy security, and boost Kenya’s economy by creating local jobs and training opportunities. 

I-REC(E) certification has created a fresh revenue stream for this, and other, projects – its rigorous international standard also makes it more attractive to international investors. Kenyan businesses are also purchasing and redeeming certificates to take ownership of their Scope 2 emissions.

Funding a just, green transition for the Global South is a significant and complex challenge on the path to net zero. I-REC(E)’s unique features are already helping to bring greater revenue into clean energy projects across developing nations.

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