Building public-private partnerships for climate-friendly investment in Africa

Abstract

Africa has the potential to use its vast and relatively untapped renewable energy to develop the energy sector on the continent. This is critical to the continent’s future development and growth as energy, especially electricity infrastructure in sub-Saharan Africa is the least developed, accessible and reliable and on average, highest priced compared to other regions in the world. These shortcomings are even more heightened in rural areas where access to power lags behind more urban areas. Increased expenditure on power generation is required to meet these challenges. According to the Africa Infrastructure Country Diagnostic (AICD) as much as US$48 billion in new investment is needed annually to make up the spending shortfalls in all infrastructure sectors. Out of that US$29 billion, or 61% is needed in the energy sector. It is worth noting that private participation in renewable energy development in Africa has varied enormously and produced heterogeneous results. In addition, the financial crisis of 2008 and the consequent fiscal crunch has put pressure on new public and private investments. Consequently, it is ever so important and timely to find innovative solutions for scaling up private sector participation for renewable energy development on the continent. To this end UNECA and Trinity International LLP have prepared this study on Building Public-Private Partnerships to Scale Up Resources for Climate-Friendly Investment in Africa.