In June 2025, Paris (France) based International Energy Agency (IEA) released the 10th edition of its ‘World Energy Investment Report’. The report highlighted that China is expected to account for over 25% (1/4th) of global energy investment in 2025, while, developing countries are struggling to raise capital for energy infrastructure.
- The report further showed that over the last 10 years, the total share of China in global energy investment has increased from 25% to approximately 33%. This growth is mainly driven by investment in solar, wind, hydropower, nuclear, battery storage and Electric Vehicles(EV).
- As per the report, global investment on energy is projected to reach an unprecedented USD 3.3 trillion in 2025 (a 2% increase in real terms on 2024) amid global headwinds from elevated geopolitical tensions and economic uncertainty.
About World Energy Investment Report 2025:
i.The World Energy Investment Report, published annually by the IEA, serves as the global benchmark for tracking investments in the energy sector.
ii.The 2025 report provides a comprehensive overview on the investment picture in 2024 and an initial reading of the emerging scenario for 2025.
iii.The report sets a global benchmark for monitoring capital inflows in the energy sector and evaluates how investors are assessing risks and opportunities across various sectors like: fuel and electricity supply, critical minerals, efficiency, Research & Development (R&D), and energy finance.
Global Scenario:
i.The report showed that investment in clean energy technologies which includes renewables, nuclear grids, storage, low-emission fuels etc. is set to hit a record USD 2.2 trillion in 2025, which is twice the investment in oil, natural gas and coal (USD 1.1 trillion).
ii.The report highlighted that investment in the electricity is projected to reach USD 1.5 trillion in 2025. This figure is around 50% higher than the total amount being spent on bringing oil, natural gas and coal to market.
iii.Global investments on low-emission power generation has almost doubled over the last 5 years, led by Solar Photovoltaic (PV). The report projected that investment in solar, both utility-scale and rooftop will reach USD 450 billion in 2025, making it the single largest item in world energy investment inventory.
- Also, investment in nuclear power is expected to be more than USD 70 billion in 2025, marking a 50% increase over the last 5 years.
- The investment in battery storage is projected to increase above USD 65 billion.
iv.As per the report, the lack of modern grid infrastructure is one of the biggest barriers investment in Renewable Energy (RE) sector.
- It highlighted that investment in electricity grids, currently USD 400 billion annually is not sufficient to keep up with RE deployment and rising electricity demand.
v.The report further underscored that fossil fuel investment is projected to decline, with upstream oil spending is expected to decrease by 6% in 2025, which will be the sharpest decline since 2016, outside the COVID-19 pandemic.
- However, Liquefied Natural Gas (LNG) is showing positive growth, with major new projects in the United States of America (USA), Qatar, and Canada expected to increase the global capacity significantly between 2026 and 2028.
vi.Africa’s investment in fossil fuels declined significantly from USD 125 billion(in 2015) to USD 54 billion(in 2025) and the continent continues to receive only 2% of global clean energy financing, largely hindered by high debt burdens and financial constraints.
India-Specific:
i.The report highlighted that India and Brazil are among emerging and developing countries that have made significant contribution for their energy investments.
ii.As per the report, India has significantly increased its investment in RE sector, from USD 13 billion (in 2015) to USD 37 billion (in 2025).
- During the same time period, India’s fossil fuel investments also increased from USD 41 billion to USD 49 billion.
iii.The report revealed that India’s investment on nuclear and other clean energy sources has increased from USD 1 billion (in 2015) to USD 6 billion (in 2025).
- India has also pledged USD 245 million to nuclear projects for Financial Year 2025-26 (FY26) to increase its nuclear capacity to 100 Giga Watt (GW) by 2047.
iv.The report showed that over the last 5 years, India’s investment in solar PV generation has averaged USD 16 billion annually, which is 70% higher than the average of the previous 5 years.
v.Since 2015, India’s investment in grids and storage has decreased from USD 31 billion to an expected USD 25 billion in 2025.
Key Recommendations:
i.The IEA urged for global public finance to be scaled up to raise private capital in emerging and developing economies to address the gap in clean energy investment.
ii.The IEA called the countries to include the cost of capital problem in the ‘Baku to Belem Roadmap’ launched at 29th Conference of Parties to the United Nations Framework Convention on Climate Change (COP29) held in Baku, Azerbaijan in 2024.
- The roadmap has the set the target to mobilise at least USD 1.3 trillion in finance for low-emissions projects in developing countries like India by 2035.
iii.The IEA report noted that current energy investments are insufficient to achieve the goals to set at COP28 held in 2023.
- Thus, the report recommended that annual investments must double to meet a tripling of installed RE capacity by 2030.
About International Energy Agency (IEA):
It is an autonomous intergovernmental organization which provides policy recommendations, analysis and data on the entire global energy sector.
Executive Director (ED)- Dr. Fatih Birol
Headquarter- Paris, France
Member nations- 32 (India joined IEA as association member nation in 2017)
Established- 1974
