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Financing Clean Energy Access in Sub-Saharan Africa

Author: Bruno Michoud

Publisher: Springer Nature

Published: 2021-07-15

Total Pages: 197

ISBN-13: 303075829X

This open access book analyses barriers and challenges associated with the financing of clean energy access in sub-Saharan Africa. By considering various economic, financial, political, environmental and social factors, it explores the consequences of energy poverty across the region and maps the real and perceived investment risks for potential capital providers, both domestic and international. Furthermore, it analyses risk mitigation strategies and innovative financing structures available to the public and private sectors, which are aimed at leveraging capital in the clean energy sector at scale and fostering the creation of an enabling business and investment environment. More specifically, the present book analyses how to (i) enhance capital allocation in projects and organisations that foster clean energy access in the region, (ii) mobilize private capital at scale and (iii) decrease the cost of financing through risk mitigation strategies. Going beyond traditional approaches, the book also considers socioeconomic and cultural aspects associated with investment barriers across the subcontinent. Moreover, it urges the public and private spheres to become more actively involved in tackling this pressing development issue, and provides policy recommendations for the public sector, including proposals for business model evolution at multilateral agencies and development institutions. It will appeal to a wide readership of both academics and professionals working in the energy industry, the financial sector and the political sphere, as well as to general readers interested in the ongoing debate about energy, sustainable development and finance.

Financing Energy Access in Sub-Saharan Africa

Author: Nicola Bilotta

Publisher:

Published: 2018

Total Pages: 21

ISBN-13: 9788893680899

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The electrification of Sub-Saharan Africa has traditionally suffered from a lack of adequate investments, given the scarcity of domestic funds and the higher regional risk perceived by foreign investors. And yet, electrification of the continent has accelerated lately, driven by innovative financing instruments that fit the African framework. Such tools as aggregation, securitization and guarantee instruments reduce risk premiums, thus increasing the attractiveness of the sector and making it easier for international institutions to provide back-up funding for private, local and decentralized projects. Critical in this regard has been Africa’s FinTech system, which enables forms of mobile payment and micro-credit access, resulting in innovative business models. Such sets of tools will be then fundamental to maintaining the current trends and, eventually, reach the long-awaited universal access to energy for those in Sub-Saharan Africa.

Financing Energy Access in Sub-Saharan Africa

Author: Nicola Bilotta

Publisher:

Published: 2022

Total Pages: 0

ISBN-13:

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Independent Power Projects in Sub-Saharan Africa

Author: Anton Eberhard

Publisher: World Bank Publications

Published: 2016-04-18

Total Pages: 385

ISBN-13: 1464808015

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Inadequate electricity services pose a major impediment to reducing extreme poverty and boosting shared prosperity in Sub-Saharan Africa. Simply put, Africa does not have enough power. Despite the abundant low-carbon and low-cost energy resources available to Sub-Saharan Africa, the region s entire installed electricity capacity, at a little over 80 GW, is equivalent to that of the Republic of Korea. Looking ahead, Sub-Saharan Africa will need to ramp-up its power generation capacity substantially. The investment needed to meet this goal largely exceeds African countries already stretched public finances. Increasing private investment is critical to help expand and improve electricity supply. Historically, most private sector finance has been channeled through privately financed independent power projects (IPP), supported by nonrecourse or limited recourse loans, with long-term power purchase agreements with the state utility or another off-taker. Between 1990 and 2014, IPPs have spread across Sub-Saharan Africa and are now present in 17 countries. Currently, there are 125 IPPs, with an overall installed capacity of 10.7 GW and investments of $24.6 billion. However, private investment could be much greater and less concentrated. South Africa alone accounts for 67 IPPs, 4.3 GW of capacity and $14.4 billion of investments; the remaining projects are concentrated in a handful of countries. The objective of this study is to evaluate the experience of IPPs and identify lessons that can help African countries attract more and better private investment. At the core of this analysis is a reflection on whether IPPs have in fact benefited Sub-Saharan Africa, and how they might be improved. The analysis is based primarily on in depth case studies, carried out in five countries, including Kenya, Nigeria, South Africa, Tanzania and Uganda, which not only have the most numerous but also among the most extensive experience with IPPs.

Energy in Africa

Author: Manfred Hafner

Publisher: Springer

Published: 2018-08-06

Total Pages: 112

ISBN-13: 331992219X

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This open access book presents a picture of the current energy challenges on the African continent (and the Sub-Saharan region in particular) and proposes pathways to an accelerated energy transition. Starting with an analysis of the status quo and the outlook for Africa’s energy demand and energy access, it provides an account of the available resources, including hydrocarbons and renewable energy resources, which are playing an increasingly crucial role. It then moves on to analyze the level of investment required to scale-up Africa’s energy systems, shedding light on the key barriers and elaborating on potential solutions. It also provides a suggestion for improving the effectiveness of EU–Africa cooperation. While mainly intended for policymakers and academics, this book also speaks to a broader audience interested in gaining an overview of the challenges and opportunities of the African energy sector today and in the future.

Sub-Saharan Africa is lighting up

Author: Nii Ofei Daku Mante.

Publisher: RTI Press

Published: 2018-11-19

Total Pages: 34

ISBN-13:

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This research paper provides a regional review of the state of electricity access in Sub-Saharan Africa (SSA), focusing on installed capacity, electricity generation, the growth of renewable energy, electricity consumption, government investment, public financial flows, and several major initiatives. The study contrasts electrification between 1990 and 2010 with recent efforts and identifies countries that are consistently making progress and those that lag. The analyses show signs of progress on scaling up SSA power infrastructure and increasing electricity access, particularly in the Eastern and Western sub-regions. The installed generation capacity expanded at an average rate of 2.43 GW/year between 2005 and 2015. Renewable energy is growing, particularly solar, wind, and geothermal; about 9.7 GW of renewable energy capacity was installed between 2010 and 2016. Over this period, the net electricity generation in SSA increased at 9.1 TWh/year, more than double the historical average growth of 4.02 TWh/year (1990–2010). In general, the study found that rates of electrification across the entire region are more than twice the historical rates, and an average of at least 26 million people are now gaining access to electricity yearly. Nevertheless, progress is uneven across SSA. As of 2016, almost half of the population without electricity access live in Nigeria, DR Congo, Ethiopia, Tanzania, and Uganda. Quantitative analysis suggests that about 70 million people in SSA would have to gain access every year from 2017 to achieve universal access by 2030. Overall, SSA countries with national programs on energy access supported by policy/regulatory framework and infrastructure investment are making progress.

Energy Subsidy Reform in Sub-Saharan Africa

Author: Mr.Trevor Serge Coleridge Alleyne

Publisher: International Monetary Fund

Published: 2013-08-12

Total Pages: 125

ISBN-13: 1484366549

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The reform of energy subsidies is an important but challenging issue for sub-Saharan African (SSA) countries. There is a relatively large theoretical and empirical literature on this issue. While this paper relies on that literature, too, it tailors its discussion to SSA countries to respond to the following questions: Why it is important to reduce energy subsidies? What are the difficulties involved in energy subsidy reform? How best can a subsidy reform be implemented? This paper uses various sources of information on SSA countries: quantitative assessments, surveys, and individual (but standardized) case studies.

Energy Transition & Geopolitics in Sub-Saharan Africa

Author: Michael Imran Kanu

Publisher:

Published: 2017

Total Pages: 0

ISBN-13:

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The global energy transition and geopolitics scene paints a picture of uncertainty and anxiety. This is propelled by the increasing need for renewable energy, the disruptive Middle Eastern conflicts and the resurgence of the global political and ideological divide, thereby threatening the predominately conventional hydrocarbon energy sources. Climate change parameters add further complexity, and perhaps an additional burden for sub-Saharan Africa struggling to develop energy infrastructure to meet its increasing demands. Looming energy transition and the abundance of natural resources poses both threats and opportunities for sub-Saharan Africa. The challenges include the lack of significant investment in energy infrastructure, human resources, and technology. The natural resource of sub-Sahara Africa places it in a prime position to effectively exploit and possibly lead in renewable energy transition. At present sub-Saharan Africa's reliance on biomass is still high and the need to transition from heavy reliance on unsustainable biomass to renewable energy is stark. Equally stark is the optimism to leapfrog the conventional path to energy development and shift directly to renewables, in view of the advances in technology and climate change concerns. Recent trends show a shift in policy by African States towards abolishing energy production state monopolies and creating the platform to successfully overcome the energy trilemma, especially by financing sustainable energy projects. This paper, approached from a legal perspective, examines the recent optimism in Sub- Saharan Africa's energy transition policies, evaluating the financing patterns, with the aim of assessing how the financing methods have promoted or limited energy projects. This article claims that the adoption of a legal framework that is receptive to innovative financing schemes will reduce the heavy reliance on donor support, worryingly influenced by global geopolitics. It further asserts that sub-Saharan Africa's energy transition depends greatly on the supplementation of the traditional donor driven, highly politicized funding patterns, to developing specific themed equity and debt financing, including private-public partnerships, securitisation, targeting investors (even within Africa), with political commitments to open market access, thereby democratizing energy access and production.

Electricity Access in Sub-Saharan Africa

Author: Moussa P. Blimpo

Publisher: World Bank Publications

Published: 2019-03-19

Total Pages: 160

ISBN-13: 1464813779

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Access to reliable electricity is a prerequisite for the economic transformation of African economies, especially in a digital age. Yet the electricity access rate in Sub-Saharan African countries is often substantially low, households and businesses with access often face unreliable service, and the cost of the service is often among the highest in the world. This situation imposes substantial constraints on economic activities, provision of public services, adoption of new technologies, and quality of life. Much of the focus on how best to provide reliable, affordable, and sustainable electricity service to all has been on mitigating supply-side constraints. However, demand-side constraints may be as important, if not more important. On the supply side, inadequate investments in maintenance result in high technical losses; most state-owned utilities operate at a loss; and power trade, which could significantly lower the cost of electricity, is underdeveloped. On the demand side, the uptake and willingness to pay are often low in many communities, and the consumption levels of those who are connected are limited. Increased uptake and use will encourage investment to improve service reliability and close the access gap. This report shows that the fundamental problem is poverty and lack of economic opportunities rather than power. The solution lies in understanding that the overarching reasons for the unrealized potential involve tightly intertwined technical, financial, political, and geographic factors. The ultimate goal is to enable households and business to gain access, to afford to use, and utilities to recover their cost and make profits. The report makes the case that policy makers need to adopt a more comprehensive and long-term approach to electrification in the region—one centered on the productive use of electricity at affordable rates. Such an approach includes increased public and private investment in infrastructure, expanded access to credit for new businesses, improved access to markets, and additional skills development to translate the potential of expanded and reliable electricity access into substantial economic impact. Enhancing the economic capabilities of communities is the best way to achieve faster and more sustainable development progress while addressing the broad challenges of affordability, low consumption, and financial viability of utilities, as well as ensuring equitable provision between urban and rural areas.

Africa's Power Infrastructure

Author: Orvika Rosnes

Publisher: World Bank Publications

Published: 2011

Total Pages: 352

ISBN-13: 0821384554

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Africa's Power Infrastructure: Investment, Integration, Efficiency is based on the most extensive data collection exercise ever undertaken on infrastructure in Africa: the Africa Country Infrastructure Country Diagnostic (AICD). Data from this study have provided new insights on the extent of a power crisis in the region, characterized by insufficient capacity, low electricity connection rates, high costs, and poor reliabilityùand on what can be done about it. The continent faces an annual power sector financing gap of about $21 billion, with much of the existing spending channeled to maintain and operate high-cost power systems, leaving little for the huge investments needed to provide a long-term solution. Meanwhile, the power crisis is taking a heavy toll on economic growth and productivity. This book asserts that the current impediments to economic growth and development need to be tackled through policies and investment strategies that renew efforts to reform state-owned utilities, build on the lessons of private participation in infrastructure projects, retarget electrification strategies, expand regional power trade, and mobilize new funding resources. Further development of regional power trade would allow Africa to harness larger-scale and more cost-effective energy sources, reducing energy system costs by US$2 billion and carbon dioxide emissions by 70 million tons annually. But reaping the promise of regional trade depends on a handful of major exporting countries raising the large volumes of finance needed to develop generation capacity for export; it also requires a large number of importing countries to muster the requisite political will. With increased utility efficiency and regional power trade in play, power costs would fall and full cost recovery tariffs could become affordable in much of Africa. This will make utilities more creditworthy and help sustain the flow of external finance to the sector, which is essential to close the huge financing gap.