## Powering Growth ## Source details **Canonical URL:** [Powering Growth](https://www.imf.org/en/publications/fandd/issues/2021/09/fighting-climate-change-in-africa-ireri) ## Other formats - [Markdown version](/en/publications/fandd/issues/2021/09/fighting-climate-change-in-africa-ireri/index.md) - [Structured JSON version](/en/publications/fandd/issues/2021/09/fighting-climate-change-in-africa-ireri/index.json) - [Bundle manifest](/en/publications/fandd/issues/2021/09/fighting-climate-change-in-africa-ireri/bundle-manifest.json) ## Bibliographic details - Authors: BENSON IRERI, REBEKAH SHIRLEY - Published: September 2, 2021 --- ### Energy access overview - 770 million people have no electricity—75 percent of whom live in sub-Saharan Africa (IEA, 2019). - 900 million lack access to clean cooking in the region (IEA, 2019). - Lack of electricity and clean cooking limits educational and business opportunities and people’s economic prospects and well-being. ### Financing gap and investment needs - Closing the energy access gap in sub-Saharan African countries will require an estimated annual investment of $28 billion up to 2030 (IEA). - $13 billion for mini-grids. - $7.5 billion for grid. - $6.5 billion for off-grid investments. - Clean cooking: $131 million committed versus $4.5 billion needed by 2030. - Countries such as Chad, Ethiopia, and Nigeria face major financing shortfalls. - The Democratic Republic of the Congo and Ethiopia, where 95 percent of the population lacks access to clean cooking, receive less than 1 percent of the annual investment. ### Constraints and risks to scaling investment - Political instability. - Macroeconomic uncertainty (because of inflation and exchange rates). - Policy and regulatory issues. - Institutional weaknesses. - Lack of transparency. - Market failures and insufficient aid to channel financing where it is needed most. - Several developed economies have failed to deliver on their pledge of $100 billion annually in climate finance and are cutting foreign aid, at a time when investment needs to be doubled. ### Successful initiatives and catalytic financing examples - Sustainable Use of Natural Resources and Energy Finance initiative (French Development Agency facility): - Catalyzes commercial lending to the clean energy sector. - Has helped finance more than 60 projects in commercial and industrial sectors and on-grid projects across Kenya, Tanzania, and Uganda. - Provides structured financing, technical assistance, support for investment structuring, and uses guarantee mechanisms to share some credit risks. - Sustainable Energy Fund for Africa (multi-donor fund established in 2011, managed by the African Development Bank): - Provides technical assistance, concessional and catalytic financing instruments to de-risk investments. - Targets green baseload power, green mini-grids, and energy efficiency. - Facilitated AfDB’s first two scale-up programs in Burkina Faso and the Democratic Republic of the Congo. - Played a key role in developing energy blended finance initiatives, including the Africa Renewable Energy Fund. - Africa Renewable Energy Fund and Frontier Energy: - Frontier Energy has invested over $1.8 billion in more than 45 renewable energy projects in sub-Saharan Africa, with a total capacity of more than 750 megawatts. - 2020 AfDB commitments via the Sustainable Energy Fund for Africa: - $5 million committed to investment firms Enabling Qapital and Spark+ to raise equity for clean cooking companies. - €10 million from the European Union through its blending facility complemented this funding and helped attract investors. ### Policy implications and recommended actions - Urgent mobilization of capital for clean energy investment in the region is needed. - COP26 and the Energy Transition Council should play a central role in driving this mobilization. - Replication and scaling of successful catalytic instruments and blended finance facilities can help unlock private capital. - Addressing political, macroeconomic, policy, regulatory, and transparency constraints is critical to improve the investment climate and channel financing where it is needed most. *Powering Growth — BENSON IRERI, REBEKAH SHIRLEY, F&D Magazine, September 2021.* --- ## Content in this bundle - **شحذ النمو** - [شحذ النمو (Markdown version)](/-/media/files/publications/fandd/article/2021/september/ar/ireri.pdf.md){rel="alternate" type="text/markdown"} - [شحذ النمو (PDF)](/-/media/files/publications/fandd/article/2021/september/ar/ireri.pdf){rel="external" type="application/pdf"} - **Potenciar el crecimiento ● Finanzas y Desarrollo ● Septiembre de 2021** - [Potenciar el crecimiento ● Finanzas y Desarrollo ● Septiembre de 2021 (Markdown version)](/-/media/files/publications/fandd/article/2021/september/es/fighting-climate-change-in-africa-ireri.pdf.md){rel="alternate" type="text/markdown"} - [Potenciar el crecimiento ● Finanzas y Desarrollo ● Septiembre de 2021 (PDF)](/-/media/files/publications/fandd/article/2021/september/es/fighting-climate-change-in-africa-ireri.pdf){rel="external" type="application/pdf"} - **Fighting Climate Change in Africa - IMF F&D** - [Fighting Climate Change in Africa - IMF F&D (Markdown version)](/-/media/files/publications/fandd/article/2021/september/fighting-climate-change-in-africa-ireri.pdf.md){rel="alternate" type="text/markdown"} - [Fighting Climate Change in Africa - IMF F&D (PDF)](/-/media/files/publications/fandd/article/2021/september/fighting-climate-change-in-africa-ireri.pdf){rel="external" type="application/pdf"} - **Nourrir la croissance** - [Nourrir la croissance (Markdown version)](/-/media/files/publications/fandd/article/2021/september/fr/fighting-climate-change-in-africa-ireri.pdf.md){rel="alternate" type="text/markdown"} - [Nourrir la croissance (PDF)](/-/media/files/publications/fandd/article/2021/september/fr/fighting-climate-change-in-africa-ireri.pdf){rel="external" type="application/pdf"} - **Проблемы климата** - [Проблемы климата (Markdown version)](/-/media/files/publications/fandd/article/2021/september/ru/letter-ru.pdf.md){rel="alternate" type="text/markdown"} - [Проблемы климата (PDF)](/-/media/files/publications/fandd/article/2021/september/ru/letter-ru.pdf){rel="external" type="application/pdf"} - **推动经济增长 - 金融与发展 - 国际货币基金组织季刊 2021年9月号·第58卷·第3期** - [推动经济增长 - 金融与发展 - 国际货币基金组织季刊 2021年9月号·第58卷·第3期 (Markdown version)](/-/media/files/publications/fandd/article/2021/september/zh/ireri.pdf.md){rel="alternate" type="text/markdown"} - [推动经济增长 - 金融与发展 - 国际货币基金组织季刊 2021年9月号·第58卷·第3期 (PDF)](/-/media/files/publications/fandd/article/2021/september/zh/ireri.pdf){rel="external" type="application/pdf"} --- _Source: https://www.imf.org/en/publications/fandd/issues/2021/09/fighting-climate-change-in-africa-ireri_