The financial choices shaping our energy futures

Globally, energy investment by governments, households and businesses is expected to reach a new high of $3.3 trillion in 2025. How this spending is allocated has major consequences for energy security, affordability and transitions around the world.

The IEA regularly tracks capital flows in the energy sector, identifying key trends and studying their impact. Analyses such as our flagship World Energy Investment report, published annually, explore how investors are assessing risks and opportunities across all areas of fuel and electricity supply, critical minerals, energy efficiency, research and development and energy finance.

The Agency also supports governments and industry as they work to reduce barriers to investing in secure, affordable and clean energy. Our analysis is designed to enhance transparency around economic and financing trends, the cost of capital and profit dynamics. We also explore how capital markets and innovative financing instruments can drive greater investment in the energy sector – especially in emerging and developing economies, where data is often limited. 

While emerging and developing economies represent two-thirds of the global population, only 54% of energy investments went towards these markets in 2024. Though energy demand is growing the fastest in these countries, they face persistent barriers to accessing capital, including high financing costs tied to real and perceived project risks and regulatory frameworks that may not fully support investment needs.

The IEA conducts extensive analysis to identify solutions to overcome these barriers. For instance, in 2024, we prepared a Roadmap to Increase Investment in Clean Energy in Developing Countries in support of Brazil’s G20 presidency, outlining key actions governments, development finance institutions and the private sector should take to accelerate financing for clean energy projects. Additionally, through our Cost of Capital Observatory launched in 2022, the IEA actively tracks the financing climate for energy projects in emerging and developing economies, with the aim of enhancing transparency in the energy sector and building investor confidence, particularly in regions where data on financing costs is limited.

The IEA also works with government partners around the world, supporting their efforts to increase energy investment. Collaboration with partners in Southeast Asia and beyond is expanding through the establishment of the IEA’s new Southeast Asia Regional Office, while the 2024 edition of the Southeast Asia Energy Outlook features a timely and comprehensive overview of investment trends in the region. In 2026, the IEA plans to publish new analyses on financing power system integration in Southeast Asia and business models to accelerate the deployment of battery storage in Indonesia.  

Building on recent work to support governments in Africa, the IEA will also soon publish analysis on financing energy access and grid transmission across the continent. The Agency is also working closely with bilateral partners like Kenya to develop an investment plan for the country's clean cooking strategy, and with Uganda to create a plan for financing the expansion of grid transmission.

For more than 25 years, the IEA has conducted in-depth analysis on carbon markets – from compliance instruments, such as carbon taxes and emissions trading systems, to crediting mechanisms, such as carbon credit markets. The goal has been to increase global understanding of how these tools can be leveraged to meet energy and climate goals while stimulating investment to meet energy priorities.

The IEA also co-hosts the annual IEA-IETA-EPRI Workshop on Greenhouse Gas Emissions Trading, bringing together policy makers, industry leaders and researchers to discuss the latest developments and trends in carbon markets and the energy sector. In 2025, the workshop will mark its 25th anniversary.