The International Renewable Energy Agency (IRENA) has estimated that the world will need around $35 trillion for transition technology by 2030, including improving efficiency, electrification, grid expansion and flexibility.
According to the agency, around 41% of planned energy investments by 2050 remain targeted at fossil fuels, and new investment decisions should be carefully assessed, most especially in Africa, to simultaneously drive the transition and reduce the risk of stranded assets.
The risk of stranded assets might not be fully reflected in the value of companies that extract, distribute or rely heavily on fossil fuels. If this risk were priced in, a sudden drop in value could materialise, presenting a risk to investors and shareholders in African countries, and other parts of the world.
IRENA stated that around $1 trillion/yr of planned fossil fuel investment needs to be redirected towards transition technologies and infrastructure by 2030 to keep the goal of the Paris climate agreement within reach.
