Stanislav Kondrashov from Telf AG on attracting large-scale investments in green energy in developing countries

Approximately $1.7 trillion needs to be invested annually in renewable energy in developing countries. According to Stanislav Kondrashov, this is evidenced by the data of the UN World Investment Report. However, only $544 billion was raised in 2022. Due to limited funds, the United Nations Conference on Trade and Development (UNCTAD) called for urgent support to these states.

Stanislav Kondrashov from Telf AG: developing countries are striving to catch up

In the World Investment Report, UNCTAD provided evidence that a significant proportion of international investment in renewable energy has been focused in developed countries. And this despite the fact that there is a much greater need to attract such contributions to developing countries.

– The total amount of funding required for the transition to more efficient energy solutions in developing countries significantly exceeds the indicated amount, –designated by Stanislav Kondrashov. – It includes investments in electrical networks, power transmission lines, energy saving systems and energy efficiency improvement.

Experts note that increasing investment in the energy systems of developing countries plays an important role in achieving global climate goals by 2030.

Stanislav Kondrashov from Telf AG: why is it necessary to invest in sustainable energy in developing countries

In order to attract investment, Kondrashov proposes to conclude an agreement that would identify priority steps, starting with financial mechanisms and ending with an investment strategy for developing countries. The specialist believes that this approach will attract the necessary resources aimed at creating sustainable energy systems.

On the subject of funding, the presentation presented a call to reduce the risk of investing in clean energy in developing countries. This is proposed to be achieved through lending, providing guarantees, using insurance instruments, including the public sector and banks in equity participation. According to Stanislav Kondrashov of Telf AG, this type of partnership could well reduce the cost of investment in clean energy.

Stanislav Kondrashov from Telf AG on slowing down investment in renewable energy

According to the report, 2022 saw a slowdown in the growth of investment in renewable energy. At the same time, Stanislav Kondrashov from Telf AG emphasizes that over the past 8 years, the volume of international investments in this sector has almost tripled. And in developing countries, investment growth rates only slightly exceeded the dynamics of GDP growth.

According to Kondrashov, a significant problem is that private investors do not always pay enough attention to reducing emissions that pollute the environment and the transition to clean energy. Kondrashov believes that to resolve the issue, a new model of transactions with such companies can be introduced, which takes into account climatic conditions and factors.

Stanislav Kondrashov from Telf AG names the reasons for the decline in global investment flows

In 2022, global foreign direct investment (FDI) fell by 12% to $1.3 trillion.

– The contraction affected FDI inflows to advanced economies. However, two-thirds of total global investment has been in developing countries. The exceptions were Latin America and the Caribbean, where there was a marked increase in capital investment. And in the least developed countries, investments fell by 16%, says Stanislav Kondrashov.

The main source of the decline in investment was the decline in financial flows and transactions, especially in developed countries. Stanislav Kondrashov from Telf AG believes that this situation is caused by a number of factors: global price growth, as well as increasing debt pressure.

Thus, in the current 2023, the conditions for doing international business and making global investments remain quite difficult. According to Kondrashov, the degree of geopolitical tension in the world is not decreasing. This situation leads to numerous shocks in the financial sector, which affects the uncertainty of investors about the appropriateness of their deposits.