This Live Wire assesses the extent of concessional financing needed to bring to zero the incremental costs of power sector decarbonization in select low- and middle income countries. Those costs are higher for countries with high shares of emission-intensive electricity generation, limited competitiveness of renewable electricity generation, and limited options for firm, flexible low-carbon electricity generation. Concessional financing needs also depend on the cost of commercial capital in a country. Countries with a relatively low cost of commercial capital require more concessional finance to ensure that the country is not worse off by pursing power sector expansion together with decarbonization.
