The investment imperative Achieving the energy transition is not only a policy challenge – it’s a capital challenge too. Attracting long-term investment requires a strong business case, including clear market signals, reduced risk, and stable policy and financial conditions. While public support and multilateral financing once helped close the gap, today’s high interest rates and rising uncertainty are making investments harder to realize. Despite these headwinds, global investment in low-carbon energy systems reached a record $2.1 trillion in 2024 (up 11%). Yet, this marks a notable slowdown from the 24-29% annual growth seen over the previous three years.101 Investment continues to flow into mature technologies like solar and wind, but funding remains constrained for emerging solutions such as hydrogen, carbon capture and industrial decarbonization.102 According to the World Economic Forum’s Net-Zero Industry Tracker 2024, an estimated $30 trillion in additional capital is required by 2050 for the sectors in scope, of which 57% must come from external sources or ecosystems.103 Yet, current investment trends fall short of what is needed, both in terms of scale and distribution. In 2025, finance and investment dimension scores slowed to just +0.2% y-o-y, reflecting a slight weakening in overall investment conditions. At the same time, a growing disconnect emerged between demand and capital flows – over 80% of global energy demand growth came from emerging economies,104 yet more than 90% of the increase in clean energy investment since 2021 was concentrated in advanced economies and China.105 China alone attracted $818 billion in 2024, a 20% increase from the previous year.106 Without structural change, the global investment gap will widen further, especially in EMDEs, where accelerating the transition requires a dramatic scale-up in finance. To align with a net-zero pathway, global energy transition investment must reach $5.6 trillion annually by 2030, according to BloombergNEF.107 Yet, developing economies alone face an annual investment gap of $2.2 trillion.108 In 2024, it was projected that clean energy investment in EMDEs (excluding China) will exceed $300 billion for the first time, led by India and Brazil. This accounts for only about 15% of global clean energy investment. Africa accounted for less than 2% of global clean energy investment despite having the highest population growth and electrification needs.109 Closing the gap requires more than capital – it demands financing structures that function in high-risk, underserved markets. Capital costs in EMDEs remain up to seven times higher than in advanced economies, limiting project viability despite their cost-effective mitigation potential. Clean energy must now compete on fundamentals: cost, scale and bankability. Profitability is no longer optional – it’s essential for long-term energy security and investor confidence. Emerging technologies like generative AI can accelerate this shift by lowering costs, boosting performance and improving returns across the value chain. Scaling clean energy deployment cost-effectively at speed will depend on tackling three core investment challenges: 1. Mobilizing capital at speed and scale, especially in high-risk, underserved EMDE markets 2. Diversifying energy investment portfolios 3. Enhancing the bankability of clean technology projects These challenges are addressed in the strategic playbook below (Table 16). Closing the gap requires more than capital – it demands financing structures that function in high- risk, underserved markets. Fostering Effective Energy Transition 2025 46