Atlantic Council
August 2025
GLOBAL ENERGY CENTER
Strategic energy realignment: Rethinking MDB policy for growth and global stability
MDBs must recalibrate their energy investment strategies to support scalable, growth-oriented capital flows.
ATLANTIC COUNCIL
Emerging market and developing economies (EMDEs) are set to play a crucial role in the global energy market over the course of the next quarter century. Between 2018 and 2050, global energy consumption is projected to increase by 50 percent, with the most growth occurring in the Global South.1 By 2050, EMDEs (excluding China) are projected to account for nearly half of global demand for energy.2 In order to fuel this growth, demand for hydrocarbons within EMDE countries is anticipated to grow by 10 percent for oil and more than 50 percent for natural gas.3
Effective energy infrastructure deployment, however, cannot be divorced from global energy realities—particularly the continued demand for hydrocarbons in the Global South. Multilateral development banks (MDBs) and their governing nations must recognize that this demand is unlikely to decline meaningfully in the coming decades and that refusing to support hydrocarbon infrastructure simply cedes the field to strategic rivals. In a vacuum of funding from reliable Western-aligned partners, EMDEs are forced to turn to high-risk, high-cost investments, including from China.
This growth, however, is set against a backdrop of declining hydrocarbon production in developed nations, particularly within the Organisation for Economic Co-operation and Development (OECD), where energy security policies are increasingly shaped by decarbonization strategies. These strategies often deprioritize hydrocarbons in favor of rapid transitions to net-zero emissions—leaving EMDEs with few options for securing reliable and affordable energy to fuel economic growth and promote prosperity.
The resulting path for EMDEs is one of mounting uncertainty and debt, and an even higher economic barrier for long-term growth. As US Secretary of Treasury Scott Bessent put it in his April remarks to the Institute of International Finance, “The history of humanity teaches a simple lesson: Energy abundance sparks economic abundance.”4 The inverse is also true: Limiting EMDEs’ access to hydrocarbons constrains their access to energy and, thus, economic growth. This undesirable outcome, however, is not a foregone conclusion and can be addressed
1.
“EIA Projects Nearly 50% Increase in World Energy Usage by 2050, Led by Growth in Asia,” US Energy Information Administration (EIA), September 24, 2019, https://www.eia. gov/todayinenergy/detail.php?id=41433.
2.
“BP Energy Outlook 2024,” British Petroleum, 2024, https://www.bp.com/content/dam/ bp/business-sites/en/global/corporate/pdfs/energy-economics/energy-outlook/bp-energy-outlook-2024-emerging-economies.pdf.
3.
“BP Energy Outlook 2024.”
4.
“Treasury Secretary Scott Bessent Remarks before the Institute of International Finance,” US Department of the Treasury website, April 23, 2025, https://home.treasury.gov/news/ press-releases/sb0094.
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