Financing low carbon energy access in Africa

Modern energy access in Africa is critical to meeting a wide range of developmental challenges including poverty reduction and the Millennium Development Goals (MDGs). Despite having a huge amount and variety of energy resources, modern energy access in the continent is abysmal, especially Sub-Saharan Africa. Only about 31% of the Sub-Saharan African population have access to electricity while traditional biomass energy accounts for over 80% of energy consumption in many Sub-Saharan African countries. With energy use per capita among the lowest in the world, there is no doubt that Africa will need to increase its energy consumption to drive economic growth and human development. Africa also faces a severe threat from global climate change with vulnerabilities in several key areas or sectors in the continent including agriculture, water supply, energy, etc. Low carbon development provides opportunities for African countries to improve and expand access to modern energy services while also building low-emission and climate-resilient economies. However, access to finance from different sources will be critical in achieving these objectives. This paper sets out to explore the financial instruments available for low carbon energy access in Africa including the opportunities, markets and risks in low carbon energy investments in the continent.