Terms of reference for ICAI review on UK aid for energy transition
1. Overview
UK aid for energy transition supports developing countries to deliver the emission reduction goals of the 2015 Paris Agreement and contribute to the achievement of Sustainable Development Goal 7: access to affordable, reliable, sustainable and modern energy for all.
Following the 2021 Glasgow Climate Pact at COP26, which strengthened global commitments on emissions and climate finance, the UK has allocated a substantial share of its £11.6 billion international climate finance pledge to help developing nations transition to clean energy and mobilise additional investment. This has included contributions to the multilateral Climate Investment Funds and Green Climate Fund, energy research and development through the Ayrton Fund, Just Energy Transition Partnerships with developing countries to support the phasing out of coal, and expanding renewable power investments by British International Investment, the UK’s bilateral development finance institution.
In 2024 the new government reaffirmed the overall pledge on international climate finance and announced new commitments to help the poorest countries roll out clean energy. The prime minister also launched the Global Clean Power Alliance with a coalition of advanced and developing countries, to work together and share expertise with the goal of tripling renewable energy and doubling energy efficiency.
2. Scope, issues and challenges
This review will build on past ICAI work in this area including ICAI’s 2019 review UK aid for low carbon development, and draw on the analysis and findings of the 2024 reviews of UK aid for sustainable cities and UK aid’s international climate finance commitments.
The review will assess the relevance and effectiveness of all the UK’s aid-funded actions and plans to support clean energy transition for the years 2021-22 to 2025-26 and will draw forward-looking lessons to inform the UK’s strategy on international climate finance for the future. It will also assess potential energy supply chain factors and risk such as critical minerals.
The review will focus on the UK’s strategic priorities, its partnerships and alliances and the effectiveness of its efforts to mobilise and leverage finance in order to support the energy transition objectives of low- and middle-income countries.
The review will not focus on energy demand and will only consider energy access where relevant as an integral part of energy supply (for example, mini-grids and solar home kits).
3. Review questions
This review will look at the following questions:
- How relevant and effective is the UK’s strategy for the use of development aid to support its objectives for the global transition to clean energy?
- How well is the UK working with its partners and alliances to support developing countries’ energy policies and practices?
- How effective are UK efforts at leveraging and mobilising public and private finance for the global energy transition in developing countries?
4. Governance and resourcing
Harold Freeman will be the lead commissioner for the review, providing guidance and oversight, with additional input from the Chief Commissioner, Jillian Popkins.
The review will be undertaken by ICAI’s Service Provider and will be supported by ICAI’s Secretariat who will provide advice and support throughout the process.
The review will be informed through interviews with UK government officials, institution visits to the Green Climate Fund and Climate Investment Fund and engagement with expert stakeholders.
The methodology and final report will be peer reviewed by Brendan Curran of the London School of Economics and Political Science.
5. Timetable and output
The review will progress to the following timetable:
- January-April: Research and fieldwork
- May: Emerging insights (update to government)
- June-October: Report drafting and factual accuracy checks with government
- November: Publication of the review