De-Risking Energy Investment in Displacement Settings: GPA at COP 29 in Baku

As the effects of climate change worsen, more people will be forced to flee their homes, making it ever more essential to develop effective strategies to enable people to live safe, dignified lives in displacement settings. Clean energy supply is foundational to this effort, yet the vast majority of displaced people lack access. This was the backdrop for the official side event, “De-Risking Mechanisms for Energy Investment in Displacement Settings”, hosted by the Coordination Unit of the Global Platform for Action on Sustainable Energy in Displacement Settings (GPA) on 14 November at COP 29 in Baku, Azerbaijan. 

Mark Gibson, Team Lead of the GPA Coordination Unit led the session, opening with a call for the humanitarian community to shift its approach to energy in displacement settings away from traditional free distribution models and toward market-based approaches driven by sustainable financial models and focused on delivering long-term solutions. De-risking mechanisms facilitate this effort by mobilizing financing and private sector engagement in the most challenging operating contexts. 

Vincent Wierda, Global Energy Lead at the UN Capital Development Fund (UNCDF) highlighted the specific risks that companies encounter in displacement settings. In particular, the early termination clauses built into contracts by humanitarian partners and their short-term funding cycles deter companies from engaging and hinder planning for long-term O&M. UNCDF has deployed financial guarantees to overcome such challenges in other contexts and now aims to adapt this approach to displacement settings under the Decarbonising Humanitarian Energy Programme.  

David Nicholson, Chief Climate Officer at Mercy Corps, discussed misconceptions about the perceived and actual risk of customers’ willingness and ability to pay in displaced communities, sharing experiences from the Enter Energy initiative. When installing Ethiopia’s first licensed off-grid solar mini-grid in Sheder Refugee Camp, Mercy Corps found that many customers were enthusiastic to pay for quality energy services, shattering perceptions. However, Nicholson emphasized that public money will remain essential for bridging affordability gaps and mitigating currency and other risks. A market-based model is not a purely commercial model, and building energy infrastructure anywhere in the world always requires some level of subsidy to close the gap.   

During the Q&A portion of the session, Mariam Traore Chazalnoel, Acting Chief of the Climate Action Division at IOM, emphasised the need for coordination between humanitarian partners to aggregate the energy needs of displaced people, achieve scale, and lower companies’ cost of serving settlements. Patrick Tonui, Head of Policy and Regional Strategy at GOGLA, highlighted the fact that refugees have limited incomes, often because they are restricted from working, which can deter companies and investors. He called for more inclusive and consistent policymaking from host governments.   

Justine Akumu, Senior Energy Officer at the Uganda Ministry of Energy and Mineral Development highlighted the country’s efforts to develop an inclusive policy environment, integrate refugees into society, and work with partners on delivery strategies for sustainable energy in displacement settings. She encouraged international partners to continue supporting these efforts and to build the capacity of local financial institutions to support local private sector actors in serving displaced communities.  

Refugee Advocate and Partnerships Officer at Last Mile Climate Ayoo Irene Hellen ended the session with a call to action, reminding the audience that affordable energy access is a human right, including for displaced people, providing people with safety and opportunities to improve their livelihoods. “Without access to energy, there is no life,” she concluded.  

The panellists emphasized the need for innovative financing models, collaboration across sectors, and inclusive policymaking to address the unique challenges of energy investment in displacement settings. By shifting from traditional aid models to sustainable, market-driven approaches, stakeholders can mobilize resources and create long-term solutions. Ultimately, ensuring affordable and reliable energy access in these contexts is not just a practical necessity but a fundamental human right that underpins safety, dignity, and opportunity. 

The blog was written by Katherine Patterson, Knowledge Management Lead of the GPA Coordination Unit.