New finance needed to connect 200 million people in cities to grid and help tackle poverty

According to the International Institute for Environment and Development's (IIED) report 'Cities as engines of economic growth: the case for providing basic infrastructure and services in urban areas', it would cost US$1.37 billion per year up to 2045 – less than $7 per person a year – to provide each of these 200 million people, most of whom are in sub-Saharan Africa, with access to the grid that they need to develop and thrive. This equals just 0.03 per cent of annual fossil fuel subsidies.

By spending less than one per cent more a year, this vital electricity could be generated using renewable energy. This would reduce carbon emissions and help to avoid the dangerous impacts of climate change.

This includes the capital, operating, maintenance and financing costs of the generation, transmission and distribution infrastructure, IIED says.

Public interventions are crucial for securing the private finance necessary to make this possible. It is vital that national governments provide incentives such as tax rebates, power purchase agreements and feed-in tariffs to mobilise the necessary private investment.

IIED director Andrew Norton said: "Habitat III presents the world with an opportunity to make cities benefit all who live in them. Governments need to do more with public finance to direct the private sector to important social and environmental investments – such as renewable electricity for the urban poor. This is vital to helping move people out of poverty and to tackling climate change."

Access to electricity and other basic services significantly improves the health of the urban poor, as well as creating new opportunities to generate an income.

This makes it possible for them to contribute more to the urban economy, helping cities to become the economic powerhouses they have the potential to be, and to reduce the extreme inequality that can fuel political and financial crises. These investments in urban wellbeing and productivity are key to achieving the UN's Sustainable Development Goals.