Harnessing Renewables in Sub-Saharan Africa: Barriers, Reforms, and Economic Prospects
Staff Climate Notes, October 9, 2024
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Bibliographic details
- Authors: Kailhao Cai, Thibault Lemaire, Andrea Medici, Giovanni Melina, Gregor Schwerhoff, Sneha D Thube
- Published: October 9, 2024
- Series: Staff Climate Notes
- DOI: https://doi.org/10.5089/9798400290107.066
Summary
- Sub-Saharan Africa needs to significantly accelerate its electricity generation.
- Hydropower is prominent in some countries, while solar and wind power generation has lagged other world regions despite highly favorable conditions in sub-Saharan Africa.
- A mix of domestic and external financing can increase both renewable electricity generation and GDP.
Scenarios and projections
- In a scenario where about $25 bn in climate finance flows are allocated annually to renewable energy:
- Renewable electricity production could be up to 24 percent higher than in a scenario excluding this financing.
- Annual GDP growth would be boosted by 0.8 percentage point on average over the next decade.
- Labor demand in the electricity sector would strengthen.
Policy impacts and reform effects
- Policies can help catalyze climate finance.
- An ambitious package of governance, business regulations, and external sector reforms is associated with:
- A 20 percent increase in climate finance flows.
- A 7 percent increase in electricity generation over five years.
- Implementing climate policies is linked to increases in green foreign direct investment announcements and green electricity production.
Subject areas and keywords
- Subject: Climate finance, Climate policy, Commodities, Electricity, Environment, Renewable energy
- Keywords: Africa, climate finance, climate policies, Climate policy, East Africa, economic development, Electricity, electricity generation, Global, harnessing renewable, IMF analysis, IMF staff Climate, IMF staff Climate note, market reforms, renewable energy, Sub-Saharan Africa
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- Harnessing Renewables in Sub-Saharan Africa: Barriers, Reforms, and Economic Prospects