African states lack funds to provide green energy

Friday December 04 2020
Wind farm.

A wind farm in Kenya. Sub-Saharan Africa is ways away to provide affordable, reliable, modern energy due to lack of financing, a UN report says. PHOTO | FILE | NMG


With less than a decade to meet global energy goals, sub-Saharan Africa is ways away to provide affordable, reliable, modern energy due to lack of financing, according to the latest UN report.

The Sustainable Energy for All (SEforALL) report released last week, found that most African countries have inadequate finance levels and those with funds are not directing them to the areas of greatest need.

The Energising Finance: Understanding the Landscape 2020 and Energising Finance: Missing the Mark 2020 report shows the world is neglecting investments in electricity and access to clean cooking energy despite the critical need to protect the most vulnerable and save lives.

The shortage has reached acute levels in many of the 20 High Impact Countries across Africa and Asia with the largest access gaps that the reports track using the latest available data from 2018, including Angola, the Democratic Republic of Congo, Ethiopia, Kenya, Madagascar, Nigeria, Uganda and Tanzania.

The SEforALL, an international organisation that works in partnership with the United Nations to drive faster action towards the achievement of Sustainable Development Goal 7 (SDG7), said fossil fuel financing has increased substantially while funds for grid-connected renewables have decreased, despite urgent need for action and pledges made since the Paris Climate Agreement.

The reports found a significant increase in fossil fuel finance commitments in 2018, accounting for the largest portion of electricity finance flows for the first time in at least six years.


This financing risks locking countries into decades of high carbon emissions, import dependency and depreciating or stranded assets, posing fiscal, economic and environmental risks for developing countries.

The reports, which examine commitments, disbursements and demand for finance across two key areas of energy access (electricity and clean cooking) indicate that an estimated annual investment of $41 billion is needed to achieve universal residential electrification, but only one-third of this ($16 billion) has been committed.

Further, despite the clear need and opportunity for decentralised renewable energy to reach the majority of those without access, finance commitments for mini-grids and off-grid renewable energy systems remain far short of necessary levels, attracting less than one to 1.5 percent of the total finance for electricity tracked.

Barbara Buchner, global managing director at Climate Policy Initiative (CPI) expressed pessimism in meeting the SDG7.

"Based on this data, and dire lack of progress and reoccurring disbursement delays, we estimate that the world will be delayed by decades in meeting SDG7. Year after year, the numbers are showing that we will miss SDG7 targets unless we dramatically increase finance for electricity and clean cooking," said Dr Buchner during the launch of the report.

"We are in the midst of a climate emergency, and it is now more important that finance is Paris-aligned and committed to clean technologies, including mini-grids and off-grid solutions, to expand energy access to those that need it most," she added.

According to the study, energy investments are highly concentrated and not going to the countries with the greatest needs or to the right solutions, and therefore are not addressing the most urgent sustainable energy gaps.

Sub-Saharan Africa which accounts for 70 percent of people in high impact countries without access to electricity. As at 2018, the 14 high impact countries in Africa received $8.5 billion, which is less than 20 percent of the total $43.6 billion finance needed.

The six high impact countries with the lowest electricity access rates — where more than 70 percent of the population is without access — are Burkina Faso, Chad, DR Congo, Madagascar, Malawi and Niger, which are all in the bottom half of countries studied in terms of electricity finance commitments.

The research recommends urgent co-ordinated action from direct financing investment and donors to increase the share of energy access finance commitments in sub-Saharan African countries that face chronic underinvestment.

It also urged countries like China, which directed a majority of its international financing to fossil fuel projects in high impact countries in 2018, to align their external financing activities with their Paris Agreement and, increasingly, domestic commitments. The report also urged national governments to expand clean cooking access.