In a rapidly evolving world, foundational infrastructure has taken on a new meaning. It is no longer just roads, water systems, and buildings. Digital and energy infrastructure are at the heart of development and social mobility. Yet, their benefits are not evenly distributed. Today, 2.5 billion people still lack internet connectivity, and 600 million to a billion people have no or limited access to electricity. The digital divide and energy poverty frequently overlap, with vulnerable and marginalised communities often impacted by both. This begs the question: without full connectivity to modern foundational infrastructure, how can we ensure inclusive growth and development?
An integrated approach can help recognise these overlapping inequalities and develop solutions that create value and opportunities for stakeholders in the two sectors.
Combining efforts for inclusive energy and digital infrastructure can advance opportunities and value creation.
Digital and energy infrastructure are interdependent for efficient and effective functioning. While energy access is essential for powering digital devices and data storage systems (e.g. data centres), digital technologies (e.g. smart grids), are effective in improving efficiency and the reach of energy systems. With this interdependency, combined investments in both digital and energy infrastructure have the potential to positively impact sectors such as healthcare and education in underserved communities.
But, to accomplish these goals, the focus must shift to these linkages – and how they can drive greater inclusive growth and development. There are different ways the two sectors could be strategically harnessed to drive outsized impact, for example:
Interoperable solutions: An integrated policy design can help maximise the impact of digital and energy infrastructure and tackle two critical challenges simultaneously. Programs such as the digital and energy connectivity for inclusion project in Madagascar offer a model for an integrated strategy approach to unite the digital and energy sectors. While such programs acknowledge the importance of convergence between the two sectors, policymakers and other stakeholders must focus their efforts towards capitalising on this convergence to create interoperable solutions. By standardising digital interfaces in the energy sector, a seamless integration of renewable energy systems, smart grids, and financial technology platforms can be achieved. This enhances service delivery efficiency, reduces operational costs, and facilitates large-scale adoption.
Novel pathways for interaction: Beyond convergence, there is also an opportunity to utilise each sector as a force multiplier for the other. Digital technologies, such as IoT sensors and AI-driven analytics in the energy sector, can help optimise energy resources. Digital tools are being increasingly employed to drive up the efficiency of the energy sector while reducing losses and improving the sustainability of the sector. This convergence introduces new pathways for the digital sector to interact with the energy sector, such as through decentralised digital monitoring and energy management systems. This can enhance consumer engagement and allow energy providers to efficiently manage resources, reduce energy loss, and ensure sustainability through real-time data analytics.
New business models: Innovative business models created through public-private partnerships are already paving the way for integrated approaches to help solve connectivity and access challenges. Emerging models put the spotlight on pay-as-you-go (PAYGO) models for electricity that employ digital infrastructure (such as digital payment systems) to make energy access more affordable. These PAYGO models offer affordable energy access from renewable sources to off-grid communities, using available technologies to facilitate payment by instalments. These ensure collaboration between governments, tech companies, and energy providers in creating scalable solutions for both the digital and energy sectors.
Pakistan’s approach provides a real-world use case in leveraging digital connectivity to scale energy access.
The World Bank’s Energy Sector Management Assistance Program (ESMAP) recently analysed the potential for using digital tools and digital finance to scale the solar-home systems (SHS) market through a case study in the province of Sindh, Pakistan.
In the country, off-grid populations still continue to rely on decentralised energy systems as an alternative to traditional grid systems. These solar-powered mini-grids and home systems often incorporate digital tools for monitoring usage and facilitating maintenance. This integration of energy and digital systems has helped contribute to community resilience.
Apart from the use of digital tools for solar systems management, the case study explores how digital finance, particularly through mobile banking and mobile wallet solutions, is being leveraged to expand the SHS market in the country. Regulatory initiatives like the Asaan Mobile Account and the Raast payment system are helping create an interoperable, low-cost mobile banking ecosystem by the public institutions. Such initiatives can enhance support for the SHS market while enabling digital payment methods.
The pilot program in Pakistan also demonstrated the potential of merging SHS with mobile money using a PAYGO model. The digital bank Easypaisa-led pilot, conducted in collaboration with energy providers such as Roshan Energy, aimed to integrate digital finance with solar energy provision. Although the pilot exceeded initial expectations, factors such as unreliable mobile connectivity, underdeveloped energy infrastructure and misalignment of incentives hindered the sustainability of the project. While Pakistan’s market readiness for SHS is high, operational challenges still hamper the current business models, which are led by microfinance institutions.
Digital and energy infrastructure can be transformational, but collective action is required.
When harnessed together, digital connectivity and energy access can unlock immense value and spur outsized impact. Reliable energy access coupled with digital connectivity not only spurs economic activity but also improves quality of life by enhancing access to information, education, and healthcare services.
With improved connectivity and energy access, small businesses and startups in underserved regions can leverage technology to innovate and participate in the broader economy. An integrated energy and digital connectivity approach can also help address gender disparities, urban-rural divides, and other barriers to social mobility.
However, opportunities driven by this convergence can only be achieved with a commitment from diverse stakeholders. Governments and public organisations need to broaden their vision from a current, siloed approach to make the digital-energy interoperable solutions a policy priority. For example, governments should drive complementary investments in both digital and energy infrastructure, while technology companies should examine opportunities to build digital infrastructure in underserved areas, thereby connecting the unconnected. At the same time, energy providers must come on board to combine business models with technology service providers, which can drive connectivity and access from both angles.
The value and opportunities offered by the digital-energy convergence can change the status quo and incentivise these actors to pursue an integrated approach to energy access and digital connectivity.
These insights provide a path for fostering inclusive, accessible infrastructure – for people across the world.
When leveraged together, digital and energy infrastructure can drive economic development, community resilience, and inclusive growth. Leaning into innovative solutions, learning from early successes, and including a diverse range of stakeholders can each contribute to a robust infrastructure ecosystem – and help close digital and energy divides.
