BAKU, Azerbaijan, June 8. Global development finance institutions (DFIs) have emerged as the largest providers of international public finance for energy, delivering around $43 billion annually between 2015 and 2024, with nearly 80% of that sum supporting clean energy initiatives, according to the International Energy Agency’s latest outlook, Trend reports.
Much of this finance is deployed through a mix of concessional and return-generating investments, enabling DFIs to scale their impact by reinvesting in new projects over time. In 2023, DFIs outside China committed $33 billion to energy projects—the highest level since 2017—suggesting a resurgence in global public finance for the sector.
However, the outlook for 2024 and beyond remains uncertain. Political shifts and tightening public budgets in donor countries such as the United States, the United Kingdom, and the Netherlands have already triggered significant aid reductions, potentially curbing the future reach of DFIs.
Despite their focus on clean energy, DFIs continue to fund fossil fuels: in 2023, 27% of energy-related commitments still supported upstream oil and gas or gas distribution, underscoring the continued importance of hydrocarbons in emerging and developing economies (EMDEs).
Meanwhile, Chinese DFIs, which once dominated global public energy finance, have seen their role diminish. From 2022 to 2024, they accounted for less than 8% of total international public finance—a sharp decline from the 2016–2018 period, when their funding exceeded all other DFIs combined. Average project sizes have shrunk as well, with newer commitments dropping to under $250 million, compared to over $500 million in 2016.
There are signs, however, of a strategic pivot: whereas over 70% of Chinese DFI funding in 2021 went to oil and gas, recent projects have increasingly focused on renewables and power grid infrastructure.
While the role of DFIs remains critical in the global energy transition, especially for clean energy deployment in lower-income countries, the trajectory of their influence will depend heavily on policy stability and international commitment in the years ahead.
