A new world of renewables: Part II

A closer look at emerging market trends and opportunities

Amid a global push to address climate change via a net-zero transition before 2050, we identified – in part one of this series – that emerging and developed markets are following divergent decarbonization paths.

In part two, the key question for investors is where and how. Here, we look across Asia, Latin America and Africa, where renewable investments are most needed and may create the most positive social and environmental impact. We also consider innovative partnership structures that bring together development capital (focused on making positive impact) and traditional capital (focused on risk-adjusted returns).

Building greener economies in Asia

The massive and diverse economies of Asia are expanding and maturing at a relentless pace. While this rapid industrialization is bringing beneficial growth in household incomes and economic activity, it is also adding significant disruption and stress to the local environment. In our view, there is greater urgency for the renewable energy transition in Asia, especially in high-growth emerging markets.

The renewable opportunity set in Asia is massive in scale and scope

29 non-OECD markets, 4.2 billion population

The stage is set for renewables in Latin America

The energy markets of Latin America are already making good progress on the renewable energy transition, supported by sustained economic growth, healthy power demand and the right mix of policy mandates and incentives.

Latin America’s renewable outlook by city

18 non-OECD + 3 OECD markets, 608 million population

A cleaner path for development in Africa

Africa is still relatively early in its development journey, as the region strives to lift incomes and bring the ‘next billion’ people into the middle class. While Africa is industrializing rapidly, it is still heavily constrained by inadequate and inconsistent access to electricity, not to mention prohibitive pricing in some poorer countries. There are considerable economic benefits with extending electricity network coverage, reducing power cost and improving access and reliability.

The outlook for African renewable power generation is very sunny

29 non-OECD markets, 1.1 billion population

A new world of opportunities

Capital partnerships are crucial in incentivizing and mobilizing private capital to address a shared public need, particularly through renewable energy markets in emerging economies, where most of the work is needed and where most of the positive social and environmental impacts may be realized.