By As the world accelerates toward a cleaner energy future, the global energy transition has become a defining issue of 2025. With the Paris Agreement’s 2030 targets looming, nations are under pressure to reduce carbon emissions and shift to renewable energy.
While developed countries like Germany and the United States lead with massive investments in solar, wind, and hydrogen, developing nations face unique challenges—and opportunities—in this transformation.
This article explores how countries in Africa, South Asia, and Latin America are navigating the energy transition, the hurdles they face, and the innovative solutions shaping their path forward.
The Global Push for Renewables: Where Developing Nations Stand
The International Energy Agency (IEA) reported in 2024 that global renewable energy capacity grew by 10% last year, with solar and wind accounting for 80% of new installations. However, this growth is uneven.
While Europe and North America added 200 gigawatts of renewable capacity, sub-Saharan Africa contributed just 5 gigawatts—less than 3% of the global total. South Asia, led by India, fares better but still lags behind China’s massive solar expansion.
For developing nations, the energy transition is not just about cutting emissions; it’s about balancing economic growth, energy access, and climate goals. Over 700 million people globally—mostly in Africa and South Asia—lack reliable electricity.
For these countries, fossil fuels like coal and diesel remain cheap and accessible, powering industries and households. Transitioning to renewables requires overcoming financial, infrastructural, and political barriers.
Dr. Amina Bello, an energy policy expert at the University of Lagos, explains: “Developing nations face a paradox. They contribute the least to global emissions but bear the brunt of climate impacts like droughts and floods. Transitioning to renewables is critical, but without affordable financing and technology transfer, it’s a steep climb.”
Financial Hurdles: The Cost of Going Green
One of the biggest obstacles for developing nations is funding. The IEA estimates that achieving net-zero emissions by 2050 requires $4 trillion annually in clean energy investments, with 60% needed in the Global South.
Yet, international climate finance falls short. The $100 billion annual pledge made by developed nations at COP15 in 2009 remains unmet, with only $83 billion delivered in 2024, according to the OECD.
For countries like Kenya or Bangladesh, building solar farms or wind turbines requires loans or grants, but high debt levels limit borrowing capacity. The World Bank notes that 60% of low-income countries are at high risk of debt distress, making it harder to invest in long-term projects like grid modernization. Meanwhile, fossil fuel subsidies—$1.3 trillion globally in 2024—dwarf renewable incentives, distorting markets in favor of coal and oil.
Despite these challenges, some nations are finding creative solutions. In India, the government’s Solar Mission has attracted private investment by offering tax breaks and long-term power purchase agreements.
Since 2020, India has added 50 gigawatts of solar capacity, enough to power 40 million homes. Similarly, Morocco’s Noor Solar Complex, one of the world’s largest, was funded through a mix of public-private partnerships and loans from the African Development Bank.
Infrastructure and Technology Gaps
Beyond financing, developing nations face infrastructural hurdles. Many lack the grid capacity to integrate renewables, which are intermittent and require advanced storage systems. In rural Africa, where 80% of the population lives off-grid, mini-grids powered by solar are a game-changer but require technical expertise to maintain.
Technology transfer is another sticking point. Advanced renewable technologies like green hydrogen or next-generation batteries are developed in the Global North, but restrictive patents and high costs limit access.
At COP29 in Baku last November, African and Latin American leaders called for a “technology equity framework” to share innovations at affordable rates. So far, progress is slow, with only 15% of clean tech patents globally available for open licensing.
However, local innovation is stepping up. In Nigeria, startups like Arnergy are deploying modular solar systems for small businesses, reducing reliance on diesel generators. In Brazil, community-led wind projects in Bahia are powering local cooperatives, blending traditional knowledge with modern engineering.
Political and Social Dynamics
The energy transition also faces political headwinds. In coal-dependent economies like South Africa or Indonesia, phasing out fossil fuels risks job losses and economic disruption.
South Africa’s coal industry employs 90,000 workers, and unions have resisted rapid transitions without clear retraining programs. Similarly, in India, coal powers 70% of electricity, and state-owned coal companies wield significant political influence.
Public perception adds complexity. In rural areas, where energy access is a daily struggle, renewables are sometimes seen as unreliable or elitist. “People want electricity now, not promises of green grids in 10 years,” says Priya Sharma, an energy activist in Uttar Pradesh, India. Community engagement is critical to building trust, as seen in Kenya’s Garissa Solar Plant, where local leaders were involved in planning to ensure benefits like jobs and power reached residents.
Opportunities: Leapfrogging to a Green Future
Despite these challenges, developing nations have a unique opportunity to “leapfrog” outdated fossil fuel systems. Unlike industrialized countries locked into aging coal plants, many Global South nations can build modern, decentralized grids from scratch. Solar and wind are now the cheapest sources of new electricity in 90% of the world, per the IEA, making them viable for cash-strapped governments.
Africa is leading in off-grid solutions. In 2024, 10 million households adopted solar home systems, driven by pay-as-you-go models that let users pay small installments via mobile apps.
Companies like M-KOPA in Kenya have scaled this model, reaching 3 million customers. In Latin America, Chile’s Atacama Desert is becoming a global hub for green hydrogen, with pilot projects exporting to Europe by 2026.
The Road Ahead
The energy transition in 2025 is a tale of resilience and adaptation for developing nations. While financial, infrastructural, and political barriers persist, innovative solutions and global cooperation are paving the way. To succeed, the international community must deliver on climate finance promises, prioritize technology sharing, and support local leadership.
