31% of global electricity production now comes from renewable energy, surpassing coal for the first time at 30% in 2025. This historic shift marks the culmination of two decades of massive investments in solar and wind power. Yet it conceals a paradoxical reality: while Europe closes its last coal-fired power plants, Asia is building 94 GW of new capacity, and 600 million Africans remain without electricity due to the lack of financially viable alternatives.
The global energy transition reveals a fundamental imbalance. Rich countries are accelerating their exit from fossil fuels thanks to abundant and cheap capital, while emerging economies face prohibitive financing costs that make coal more attractive despite falling green technology prices.
The Essentials
- Renewables reach 31% of global electricity production in 2025, surpassing coal for the first time
- Solar financing costs in Africa are 3 to 7 times higher than in Europe (8.5-9% versus 4.7-6.4%)
- China is building 94 GW of new coal capacity in 2025 despite its climate objectives
- 600 million Africans remain without electricity, mainly due to lack of access to capital to finance renewables
The Global Shift Masks Opposing Trajectories
Data from the International Energy Agency confirms that 2025 marks a symbolic turning point. For the first time since industrialization, renewable energy surpasses coal in the global electricity mix. This progress is driven by an 85% increase in installed solar capacity and 23% for onshore wind between 2023 and 2025.
Europe illustrates this dynamic. Germany closed its last three nuclear power plants in April 2023 and now relies on a mix of 52% renewables. The United Kingdom went 68 consecutive days without burning coal in 2025, a record. Spain produces 65% of its electricity through solar and wind, transforming the Iberian peninsula into a net exporter of clean energy to France.
But this European success contrasts with Asian realities. China, the world’s largest producer of solar equipment, simultaneously commissioned 94 GW of new coal capacity in 2025. India is adding an additional 34 GW of coal to fuel its industrial growth of 7.2%. These developments alone represent the equivalent of Germany’s annual electricity consumption.
The Cost of Capital Fractures the Energy Transition
The gap widens between geographical zones due to radically different financing conditions. The IEA’s Cost of Capital Observatory reveals striking disparities: a solar project in Kenya has an average weighted cost of capital (WACC) of 8.9%, compared to 4.7% in Germany for a comparable installation.
These differences transform the economic equation. A 100 MW solar park costs $85 million to build in Kenya, but its financing costs reach $67 million over 20 years compared to $23 million in Europe. Borrowing rates fracture the global energy transition, creating a two-speed geography where the cleanest technology is not necessarily the most accessible.
In Senegal, this distortion pushes authorities toward hybrid solutions. The national electricity plan for 2035 provides for 40% imported coal and 35% liquefied natural gas, complemented by only 25% solar. This allocation reflects not an ideological choice, but a financial constraint: local banks demand sovereign guarantees to finance renewables, which the Senegalese state cannot provide on a large scale.
Sub-Saharan Africa illustrates this trap. Despite solar potential estimated at 7,900 GW by IRENA, the region installed only 12 GW of photovoltaic capacity in 2025. The 600 million Africans without electricity suffer from this perverse equation where the most sustainable solutions remain financially out of reach.
China Arbitrates Between Climate Leadership and Energy Security
Beijing navigates an assumed contradiction. The world’s leading manufacturer of solar panels with 78% of global production, China massively exports the technologies that fuel Europe’s energy transition. Simultaneously, it is developing its own coal capacity at a pace that questions its climate commitments.
This dual strategy is explained by energy security imperatives. Recent Chinese coal plants integrate carbon capture technologies and operate as flexible backup for intermittent renewables. They serve as reserves during winter consumption peaks, when demand for heating explodes in northern megacities.
The Chinese approach also reveals an industrial logic. By maintaining a domestic coal base, Beijing preserves its energy sovereignty while dominating global solar supply chains. This position allows it to export the energy transition without suffering external dependence.
India reproduces this model on a smaller scale. New Delhi installs 15 GW of solar annually since 2023, but maintains its coal production to secure the supply of its 1.4 billion inhabitants. The Modi government presents this strategy as a “bridge to renewables” rather than a contradiction with its carbon neutrality objectives by 2070.
Financial Innovation Emerges to Close the Gap
Faced with these obstacles, new financial instruments are attempting to democratize access to green capital. The Green Climate Fund approved $847 million in guarantees for solar projects in West Africa in 2025. These de-risking mechanisms allow local banks to lend at rates close to 6%, narrowing the gap with Europe.
The African Development Bank is experimenting with “climate-indexed bonds” that automatically adjust interest rates based on the carbon performance of funded projects. A wind farm in Morocco that exceeds its production targets sees its financing costs decrease, creating a direct incentive for energy efficiency.
The World Bank’s “Mission 300” initiative aims to connect 300 million Africans to the electricity grid by 2030 through decentralized solar mini-grids. This model bypasses failing national infrastructure by creating autonomous energy islands financed through public-private partnerships.
These experiments remain embryonic compared to the scale of needs. The IEA estimates that $190 billion per year would need to be mobilized until 2030 to universalize access to electricity in Africa through renewables. Current mechanisms represent less than 8% of this objective.
Technology Giants Reshape Energy Demand
The emergence of artificial intelligence paradoxically transforms the global energy equation. Data centers for Google, Microsoft, and Amazon now consume 2.8% of global electricity, a share that doubles every three years according to the IEA. This massive but predictable demand offers a new financing opportunity for renewables.
Apple signed direct purchase agreements (PPAs) in 2025 for 12 GW of solar distributed across four continents, guaranteeing developers stable revenue over 15 years. This securing of financial flows allows banks to lend on terms close to those of government bonds, mechanically reducing financing costs.
Amazon Web Services reproduces this model in Africa. The company is building a mega data center in Nigeria powered by an 850 MW solar park financed through a 20-year PPA. This approach bypasses the weaknesses of the local banking system by directly providing the guarantee of a multinational’s creditworthiness.
These private initiatives partially fill the gaps left by international public mechanisms. They remain concentrated on the most stable emerging economies, however, leaving the least developed countries in an energy impasse.
The shift of renewables above coal marks less a definitive victory than an unfinished transition. Universal access to clean energy still encounters the same financial obstacles that divide the world between those who can borrow cheaply and those who bear the risk premium. This geography of capital ultimately determines more than the technologies themselves who will have access to tomorrow’s energy.
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