One of the major obstacles to economic growth and job creation in developing countries is often an inadequate, unreliable and unaffordable supply of energy. More than 1.3 billion people around the world lack access to electricity. This stifles investment, increases costs of goods and services and often forces families to seek expensive and polluting fuel sources. An unreliable source of power can hamper the delivery of critical services like health care and reduce job opportunities—particularly for the poor and socially disadvantaged.
Many of MCC’s partner countries prioritize energy investments as building blocks for the economic development of their countries and the well-being of their citizens. MCC invests in the energy sector to help create self-sustaining power systems to meet current and future energy needs of businesses and households, as well as to attract private investment to stimulate economic growth.
Attracting private investment
With estimated power sector investment needs of approximately $40 billion in Africa and $70 billion in South Asia per year, countries in these regions need to look beyond traditional donors, development banks or domestic markets to plug the investment gap. Private sector capital and expertise are vital to expanding and improving the sector—and transparent governance, contract enforcement, creditworthy institutions and respect for the rule of law are some of the necessary preconditions to attract such investment. MCC helps partner countries to address gaps in their energy sector policies, laws and regulations and strengthens sector institutions to help create a business-friendly environment.
Access to reliable and affordable power is critical to creating and sustaining economic growth. In order to ensure such access, countries must have the right physical infrastructure in place. To facilitate this, MCC invests in strategically identified power infrastructure, spanning the entire power sector value chain.
Addressing climate change
MCC is committed to investing in climate-smart measures. In a number of countries, MCC provides grants towards the development of renewable sources of energy to serve both on- and off-grid communities. MCC also promotes energy efficiency measures, which are not only important to reduce the cost of electricity for beneficiaries but are also vital to reducing the amount of energy needed.
Supporting institutional capacity and human capital
Investing in the capacity of energy institutions helps create a workforce with the necessary skills to deliver the services required to help an economy grow. By building the capacity of key stakeholders and providing technical assistance to public and private energy organizations, partner countries gain foundational knowledge in areas like project planning, coordination and resource management.