UK aid is effective at supporting the global energy transition but needs better strategic direction, watchdog finds

5 Nov 2025

• The UK plays a key role in funding global energy transition, with promising results, but needs a long-term strategy
• Energy transition partnerships and alliances are proliferating but their impact remains unclear
• Ahead of COP30, ICAI calls for greater transparency on how UK aid supports the transition to global clean energy, including in the world’s poorest countries

The UK plays an important role in supporting developing countries to transition to clean energy, but it lacks a clear strategy with more than 80 energy transition-related aid programmes and activities, a new report finds today (Wednesday 5 November).

With COP30 set to begin in Brazil next week, the global energy transition remains critical to supporting economic growth and reducing poverty, all while keeping global warming below dangerous levels.

Against this backdrop, the Independent Commission for Aid Impact (ICAI) assesses how well the UK’s support for energy transition in developing countries has worked over the past five years, focusing on relevant spending and activities from 2021-22 to 2025-26.

ICAI estimates the UK will have spent around £3.6 billion of official development assistance (ODA) over five years to support energy transition in developing countries across 84 programmes and activities, within the overall £11.6 billion that the UK pledged to spend on international climate finance (ICF). However, this is difficult to accurately calculate due to limitations of government data and the cross-cutting nature of energy transition programmes.

ICAI highlights the UK’s longstanding political commitment, substantial funding and recognised technical expertise as key strengths underpinning its global role in accelerating the energy transition. The review finds the UK has a broad and diverse energy transition portfolio and has used public funding effectively to promote change and mobilise private finance in many areas.

However, ICAI finds that the UK’s approach lacks a comprehensive strategy for achieving its energy transition objectives. This is likely to hamper coherent decision-making and must be addressed to secure the best value for money, particularly as the government reduces the aid budget from 0.5% to 0.3% of gross national income by 2027.

ICAI Commissioner Harold Freeman, who led the review, said: 

“The UK’s support for the transition to clean energy in developing countries shows clear impact on the ground, and the UK is a major contributor to this important agenda. But with more than 80 different programmes and activities related to energy, there are risks that this work is incoherent and fragmented.

“We are calling for a single, comprehensive strategy that clearly defines what a successful energy transition means and how the UK can best support countries at different stages of development, particularly as it manages difficult aid budget reductions.”

The review finds some weaknesses in accountability and reporting practices. While the UK’s international climate finance (ICF) monitoring and learning system is strong compared to other donors, ICAI finds it gives an incomplete picture for energy transition work – the available data does not allow an accurate breakdown of the UK’s spend on energy transition by key performance indicator, delivery channel or country.

ICAI examined the UK’s role in forming and supporting Just Energy Transition Partnerships (JETPs) with countries such as Indonesia and South Africa. These aim to help countries move away from coal power towards cleaner energy, while protecting local workers and communities. The UK has been praised for its responsive approach to these partnerships and focus on building local capacity. But funding has been slower than intended, with actual project spending lagging behind expectations and progress on reducing coal use also off track.

The review also finds the UK has played a central role in creating several international alliances, including the Global Clean Power Alliance in 2024. However, while showing some success, the proliferation of alliances risks fragmentation and duplication, particularly for developing countries with limited capacity to engage in them. Measuring the impact of these alliances is also challenging, as formal monitoring focuses mainly on direct aid spending rather than the UK’s wider influence and leadership.

ICAI finds the UK has supported effective mobilisation of finance – unlocking and channelling public and commercial finance towards sustainable development objectives. However, the report adds that a growing emphasis on mobilising private finance could divert support away from lower-income countries most in need, where investment is riskier.

The review finds examples of some good coordination between UK government departments, looking primarily at the Foreign, Commonwealth and Development Office (FCDO) and the Department for Energy Security and Net Zero (DESNZ), but says unclear responsibilities and fragmented governance are weakening the UK’s overall approach.

The review makes six recommendations for strengthening the UK’s support for energy transition in developing countries. ICAI calls for the UK to develop a clear and inclusive energy transition strategy that supports poverty reduction, improves coordination across departments, and uses funding effectively through different channels.

The government should also improve how it tracks results and learns from its energy transition programmes, clarify the role of international partnerships and alliances, set realistic targets, and clearly define how it plans to attract additional finance tailored to different countries’ needs.

ICAI’s recommendations in full: 

Recommendation 1: The UK should publish a comprehensive energy transition strategy with a clear definition and theory of change, which also reflects poverty reduction and inclusion goals

Recommendation 2: The UK should take a portfolio-level approach to identifying and allocating funding between different bilateral and multilateral channels, notably between the multilateral climate funds, based on comparative advantage and value for money

Recommendation 3: The UK should establish clear, publicly accountable departmental roles with joint accountability to strengthen decision making and coordination on energy transition

Recommendation 4: The UK should standardise and strengthen the implementation of monitoring and learning across its energy transition portfolio, particularly accountability for reporting and the use of data on transformational change, financial leverage, and the additionality of UK finance

Recommendation 5: The UK should clarify the role of its country partnerships and international alliances in supporting energy transition, introduce more realistic targets for the JETPs, and create robust performance frameworks for alliances

Recommendation 6: The UK should clearly articulate its objectives for mobilising additional finance, distinguishing between support for countries at different development stages and across the investment cycle.