Financing the Energy Transition 2025

Foreword Gurdeep Singh Chairman and Managing Director, NTPC Limited Francisco Betti Head, Global Industries Team, World Economic ForumChristian Bruch President and Chief Executive Officer, Siemens Energy Financing the Energy Transition: Meeting a Rapidly Evolving Electricity Demand January 2025 The energy transition is one of the greatest challenges and opportunities of our time. It demands not only technological innovation but also significant financial investment and international cooperation. This white paper brings together diverse perspectives and comprehensively addresses these needs. We explore local, regional and global perspectives, offering a thorough overview of the financial requirements of the energy transition from various geographical angles. We highlight the unique challenges and opportunities faced by different regions, emphasizing the importance of tailored approaches. And we examine the necessary investment mechanisms for the energy transition, exploring financial strategies and innovative solutions to bridge the investment gap. The sheer scale of investment required to modernize grids, integrate renewable energy at unprecedented levels and ensure reliable energy supply calls for creative and adaptable financial strategies. The development of new financing mechanisms that can accelerate the energy transition is central to this effort. The role of regulatory frameworks in creating a conducive environment for these investments to flourish is essential; and it is equally important to engage small and medium-sized enterprises (SMEs), which play a pivotal role in innovation and market development. Their involvement is key to scaling-up new technologies. The success of the energy transition hinges on our ability to finance the energy systems of the future, ensuring they are affordable, resilient and sustainable. Access to long-term, low-cost financing is crucial to ensuring the viability of this transition, with our primary focus on reducing both capital costs and the cost of capital. Achieving global climate goals will require significant investment and this will only materialize if we focus on innovative financing mechanisms, foster international cooperation and maintain regulatory predictability. Recognizing regional differences, reducing financing costs, supporting SMEs and leveraging philanthropic funds are critical to this endeavour. We hope this white paper serves as a valuable resource for stakeholders across the world committed to accelerating the global energy transition and building a sustainable, reliable and affordable energy future. Financing the Energy Transition: Meeting a Rapidly Evolving Electricity Demand 5