Market Studies for Energy Efficiency and Renewable Energy Financing in Sub-Saharan Africa

Sub-Saharan Africa holds significant potential for renewable energies and energy efficiency that has so far, however, gone largely untapped. Limited access to financial resources often hampers investors willing to engage in the expansion of renewable energies and energy efficiency.

As part of a UNFCCC/GEF Initiative, the African Development Bank (AfDB) created the African Climate Technology and Finance Center and Network (ACTFCN) in 2014 to support member countries in sub-Saharan Africa in increasing implementation of low-carbon and climate-friendly technologies. One of the three main components of the ACTFCN targets is the integration of these technologies into investment programmes and projects. In this framework, the AfDB is seeking to establish a finance facility for small and midsize investment in energy efficiency and renewable energy in a number of sub-Saharan African countries. The programme would be implemented in collaboration with local financial institutions, while the financial sector development department of the AfDB would provide medium to long-term financing for them.

In order to assess the potential and the feasibility of this programme in four selected sample countries, adelphi conducted a market study with Climate & Energy Solutions and Artelia to assess the needs related to financial and technical support for investments in the fields of renewable energy and energy efficiency. In each of the selected countries, the consortium analysed the possibility of setting up a credit line to support small and midsize investment in sustainable energy projects in the short and medium terms. Recommendations for the design of a financing facility were derived from the results of the assessment. adelphi was in charge of the country studies for Kenya and South Africa. The consortium additionally analysed Nigeria and Cameroon.