Emerging Markets Set for $356 Billion Renewable Energy Investment

Capital expenditure on solar and onshore wind projects in emerging and developing markets is projected to reach $356 billion by 2040, according to data from Rystad. This projection is fueled by increasing demand for renewable energy, which is expected to account for 42 percent of power generation in these regions by 2030, adding 3,251 gigawatts (GW) of capacity.

The International Energy Agency (IEA) anticipates that under an accelerated scenario, net renewable energy additions could exceed 4,000 GW. Despite these opportunities, high financing costs and perceived credit risks hinder project development.

The IEA reports that the average weighted average cost of capital (WACC) for large solar photovoltaic projects in major emerging economies was up to twice that of advanced economies from 2015 to 2024. A 2025 analysis by the Organisation for Economic Co-operation and Development found that 80 percent of rated African countries were classified as high-risk borrowers.

The Global Emerging Markets Risk Database aims to address the information gap regarding investment risks in these markets.