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New Energy World™
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Energy efficiency is the key to achieving affordable, secure power in developing nations – World Bank
23/7/2025
News
Harnessing the potential of energy efficiency in developing countries can facilitate affordable and secure energy, drive stronger economies, and create more jobs, according to a recent World Bank report. It finds that for every dollar invested energy efficiency can yield $3 to $5 in returns.
The report makes the case for governments to place energy efficiency at the heart of energy policy and planning. It notes that energy efficiency can deliver many socio-economic benefits, including reduced energy poverty and government spending, enhanced resilience and lessen pollution.
The report finds that energy efficiency can cut future energy supply investments significantly – up to $11.6bn in power savings for a typical middle-income country by 2050. It can also boost competitiveness and create jobs. In 2022, it was the biggest source of jobs across the energy sector, employing almost 11 million people worldwide – ranging from manufacturing and construction to installation and support services.
‘Energy efficiency is no longer optional – it is a necessity for countries seeking affordable and reliable energy for their people, while driving economic growth and creating jobs,’ comments Guangzhe Chen, World Bank Vice President for Infrastructure.
Nearly two-thirds of the world’s primary energy is wasted, states the report. So it urges governments, financial institutions and the private sector to prioritise energy efficiency and shift from small-scale pilots and projects to national programmes across all users – in public facilities, households and industry. These efforts will help countries manage rising power demand, prevent overspending on new energy infrastructure, cut fuel imports, and reduce future debt in their energy sectors.
However, energy efficiency accounts for only a fraction of energy investments in emerging economies, according to the report. Political will and supportive policies are in short supply, and inadequate financing and unreliable information also hinder progress. Low-income and lower-middle-income countries face the most acute barriers due to high capital costs and limited access to financing, making it harder for them to invest in energy efficiency.
The report highlights that achieving the full potential of energy efficiency will require a concerted effort by governments, partners and the private sector. It emphasises that multilateral development banks, donor partners and client countries must work together to ensure energy efficiency is prioritised by government policies and strengthened institutions.
Technical assistance and financing can support countries to, over time, transition their smaller-scale projects to national programmes. These efforts will send a powerful signal to the market, which can, in turn, bring in new suppliers and competition, thereby driving down prices for all consumers and mobilising commercial financing, according to the report.
