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Indicator Name, Target and Goal

Indicator 7.a.1: International financial flows to developing countries in support of clean energy research and development and renewable energy production, including in hybrid systems

Target 7.a: By 2030, enhance international cooperation to facilitate access to clean energy research and technology, including renewable energy, energy efficiency and advanced and cleaner fossil-fuel technology, and promote investment in energy infrastructure and clean energy technology

Goal 7: Ensure access to affordable, reliable, sustainable and modern energy for all

Definition and Rationale

Definition:

This indicator is defined as the total public international financial flows, i.e. ODA and OOF and the IRENA flows, to developing countries in support of clean energy research and development and renewable energy production, including in hybrid systems. They are expressed in current United States Dollars (USD). 

Concepts:

Official Development Assistance (ODA) is defined by OECD’s Development Assistance Committee (DAC) as those flows to countries and territories on the DAC list of ODA recipients and to multilateral institutions which are:

(1)    Provided by official agencies, including state and local governments, or by their executive agencies; and

(2)    Each transaction if which:

(a) is administered with the promotion of the economic development and welfare of developing countries as its main objective; and

(b) is concessional in character and conveys a grant element of at least 25 percent (calculated at a rate of discount of 10 percent). 

Other Official Flows (OOF) are defined as transactions by the official sector which do not meet the conditions for eligibility as ODA, either because they are not primarily aimed at development, or because they are not sufficiently concessional. They also exclude officially supported export credits. 

Clean energy research and development and renewable energy production, including in hybrid systems covers the following sector codes: 

23210 Energy generation, renewable sources – multiple technologies - Renewable energy generation programmes that cannot be attributed to one single technology (codes 23220 through 23280 below). Fuelwood/charcoal production should be included under forestry 31261;

23220 Hydro-electric power plants - Including energy generating river barges;

23230 Solar energy - Including photo-voltaic cells, solar thermal applications and solar heating;

23240 Wind energy - Wind energy for water lifting and electric power generation;

23250 Marine energy - Including ocean thermal energy conversion, tidal and wave power;

23260 Geothermal energy - Use of geothermal energy for generating electric power or directly as heat for agriculture, etc.; and

23270 Biofuel-fired power plants Use of solids and liquids produced from biomass for direct power generation. Also includes biogases from anaerobic fermentation (e.g. landfill gas, sewage sludge gas, fermentation of energy crops and manure) and thermal processes (also known as syngas); waste fired power plants making use of biodegradable municipal waste (household waste and waste from companies and public services that resembles household waste, collected at installations specifically designed for their disposal with recovery of combustible liquids, gases or heat). See code 23360 for non-renewable waste-fired power plants. 

Research and development of energy efficiency technologies and measures is captured under CRS sector code 23182 on Energy research. The above flows also include technical assistance provided to support production, research and development as defined above. 

The IRENA flows are defined as all additional loans, grants and equity investments received by developing countries (defined as countries in developing regions, as listed in the UN M49 composition of regions) from all foreign governments, multilateral agencies and additional development finance institutions (including export credits, where available) for the purpose of clean energy research and development and renewable energy production, including in hybrid systems. These additional flows cover the same technologies and other activities (research and development, technical assistance, etc.) as listed above and exclude all flows extracted from the OECD/DAC Creditor Reporting System (CRS). 

Rationale and Interpretation:

Total ODA and OOF flows to developing countries quantify the public financial effort (excluding export credits) that donors provide to developing countries for renewable energies. The additional flows (from the IRENA database) capture the flows to non-ODA Recipients in developing regions, flows from countries and institutions not currently reporting to the DAC and certain other types of flows, such as export credits. 

Energy access is a major development constraint in many developing countries and, while starting from a relatively low base, energy demand is expected to grow very rapidly in many of these countries in the future. This presents an opportunity for developing countries to utilize clean and renewable technologies to meet their future energy needs if they can gain access to the appropriate technologies and expertise. This indicator provides a suitable measure of the international support given to developing countries to access these technologies.

Data Sources and Collection Method

The OECD/DAC has been collecting data on official and private resource flows from 1960 at an aggregate level and 1973 at an activity level through the Creditor Reporting System (CRS data are considered complete from 1995 for commitments at an activity level and 2002 for disbursements). Data are reported on an annual calendar year basis by statistical reporters in national administrations (aid agencies, Ministries of Foreign Affairs or Finance, etc). 

IRENA’s data on financial flows from public sources in support of renewable energy are available in IRENA’s Public Renewable Energy Investment Database. IRENA collects this data from a wide range of publicly available sources, including the databases and annual reports of all of the main development finance institutions and 20 other bilateral and multilateral agencies investing in renewable energy. The database is updated annually and (at end-2016) covers public renewable energy investment flowing to 29 developed countries and 104 developing countries, for the period 2009-2015. As new publicly-funded financial institutions start investing in renewable energy, the IRENA database will expand to include these new investors over time.

Method of Computation and Other Methodological Considerations

Computation Method:

ODA and OOF are calculated by taking the total official flows from DAC member countries, multilateral organisations and other providers of development assistance to the sectors listed above. 

The IRENA (additional) flows are calculated by taking the total public investment flows from IRENA’s Public Renewable Energy Investment Database and excluding: domestic financial flows; international flows to countries outside developing regions; and flows reported by OECD (as described above). The flows are measured in current United States Dollars (USD). 

Comments and limitations:

Data in CRS are available from 1973. However, the data coverage is considered complete since 1995 for commitments at an activity level and 2002 for disbursements. At present, flows to clean energy research and development are only partially covered by the database and a few other areas (e.g. off-grid electricity supply, investments in improved cookstove projects) may be covered only partially. 

The IRENA database currently only covers financial institutions that have invested a total of USD 400 million or more in renewable energy. The process of continuous improvement of the database includes verifying the data against data produced by the multilateral development banks for climate finance reporting and by comparing the data with other independent reporting by international development finance agencies. 

Sub-indicator, alternative and additional indicators: N/A

Data Disaggregation

Data from OECD/DAC can be disaggregated by type of flow (ODA or OOF), by donor, recipient country, type of finance, type of aid (project, agriculture sub-sector, etc.). 

Data from IRENA can be disaggregated by technologies (i.e. bioenergy, geothermal energy, hydropower, ocean energy, solar energy, and wind energy) and sub-technologies (e.g. onshore and offshore wind), by geography (both at the country and regional level), by financial instrument and by type of recipient.

References

Official SDG Metadata URL
https://unstats.un.org/sdgs/metadata/files/Metadata-07-0a-01.pdf 

Internationally agreed methodology and guideline URL
N/A 

Other references
CRS: See all links here: http://www.oecd.org/dac/stats/methodology.htm 

IRENA Renewable Energy Finance Flows: http://resourceirena.irena.org/gateway/dashboard/?topic=6&subTopic=8 

Country examples
N/A

International Organization(s) for Global Monitoring

This document was prepared based on inputs from Organisation for Economic Co-operation and Development (OECD) and International Renewable Energy Agency (IRENA).

For focal point information for this indicator, please visit https://unstats.un.org/sdgs/dataContacts/

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