IDEAS home Printed from https://ideas.repec.org/a/spr/climat/v161y2020i2d10.1007_s10584-019-02644-x.html
   My bibliography  Save this article

Electrifying the ‘eighth continent’: exploring the role of climate finance and its impact on energy justice and equality in Madagascar’s planned energy transition

Author

Listed:
  • Tim Cholibois

Abstract

Developing country case studies have thus far been under-represented in conceptual models attempting to theorize energy transitions. This paper explores the role of climate finance in the process of Madagascar’s planned transition to renewable energy sources as envisioned in the country’s New Energy Policy in order to demonstrate the different experience in developing countries when compared to hegemonic transition narratives. Drawing upon qualitative interviews with energy finance providers and focus groups in recently electrified rural communities, this paper reveals that Madagascar’s transition is dependent on the financial resources mobilized by the government’s technical and financial partners. Climate finance emerges as a critical lever to implement environmental legislation. The interview findings were correlated with census data to evaluate how current financing strategies are directly connected to energy justice issues, namely the equality in access to affordable and clean energy. Through an analysis of projected energy finance flows and key financiers’ financing strategies, this paper exposes a shift from grant-based climate finance to financial instruments with clear return profiles, such as concessional loans and private capital, and finds that the choice of financial instrument impacts the provision of complementary social services in rural electrification schemes. Grants are linked to higher investments into complementary social services, while private financiers focus on innovation and scale. Purely private financed electrification projects were found to negatively impact social cohesion by increasing the inequality in access to energy. This study concludes that if only commercially viable energy projects were to be financed going forward, up to 19 million Madagascans might be excluded from future electrification efforts. Consequently, this paper urges researchers to consider social justice implications when evaluating climate finance strategies.

Suggested Citation

  • Tim Cholibois, 2020. "Electrifying the ‘eighth continent’: exploring the role of climate finance and its impact on energy justice and equality in Madagascar’s planned energy transition," Climatic Change, Springer, vol. 161(2), pages 345-364, July.
    • Handle: RePEc:spr:climat:v:161:y:2020:i:2:d:10.1007_s10584-019-02644-x
    DOI: 10.1007/s10584-019-02644-x
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10584-019-02644-x
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10584-019-02644-x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Wolde-Rufael, Yemane, 2009. "Energy consumption and economic growth: The experience of African countries revisited," Energy Economics, Elsevier, vol. 31(2), pages 217-224.
    2. Daniel Cohen & Pierre Jacquet & Helmut Reisen, 2007. "Loans or Grants?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 143(4), pages 764-782, December.
    3. World Bank Group, 2016. "Doing Business 2016," World Bank Publications - Books, The World Bank Group, number 22771.
    4. Urmee, Tania & Harries, David & Schlapfer, August, 2009. "Issues related to rural electrification using renewable energy in developing countries of Asia and Pacific," Renewable Energy, Elsevier, vol. 34(2), pages 354-357.
    5. Ahlborg, Helene & Hammar, Linus, 2014. "Drivers and barriers to rural electrification in Tanzania and Mozambique – Grid-extension, off-grid, and renewable energy technologies," Renewable Energy, Elsevier, vol. 61(C), pages 117-124.
    6. Praene, Jean Philippe & Radanielina, Mamy Harimisa & Rakotoson, Vanessa Rolande & Andriamamonjy, Ando Ludovic & Sinama, Frantz & Morau, Dominique & Rakotondramiarana, Hery Tiana, 2017. "Electricity generation from renewables in Madagascar: Opportunities and projections," Renewable and Sustainable Energy Reviews, Elsevier, vol. 76(C), pages 1066-1079.
    7. Chakrabarti, Snigdha & Chakrabarti, Subhendu, 2002. "Rural electrification programme with solar energy in remote region-a case study in an island," Energy Policy, Elsevier, vol. 30(1), pages 33-42, January.
    8. Fouquet, Roger, 2010. "The slow search for solutions: Lessons from historical energy transitions by sector and service," Energy Policy, Elsevier, vol. 38(11), pages 6586-6596, November.
    9. Ozturk, Ilhan, 2010. "A literature survey on energy-growth nexus," Energy Policy, Elsevier, vol. 38(1), pages 340-349, January.
    10. Williams, Nathaniel J. & Jaramillo, Paulina & Taneja, Jay & Ustun, Taha Selim, 2015. "Enabling private sector investment in microgrid-based rural electrification in developing countries: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 52(C), pages 1268-1281.
    11. Rohit Pathania & Arnab Bose, 2014. "An analysis of the role of finance in energy transitions," Journal of Sustainable Finance & Investment, Taylor & Francis Journals, vol. 4(3), pages 266-271, July.
    12. AfDB AfDB, . "African Development Bank Group - Annual Report 2018," Annual Report, African Development Bank, number 2445.
    13. Sanjeev Gupta & Benedict Clements & Emanuele Baldacci & Carlos Mulas-Granados, 2004. "The persistence of fiscal adjustments in developing countries," Applied Economics Letters, Taylor & Francis Journals, vol. 11(4), pages 209-212.
    14. Marcotullio, Peter J. & Schulz, Niels B., 2007. "Comparison of Energy Transitions in the United States and Developing and Industrializing Economies," World Development, Elsevier, vol. 35(10), pages 1650-1683, October.
    15. Matinga, Margaret Njirambo & Annegarn, Harold J., 2013. "Paradoxical impacts of electricity on life in a rural South African village," Energy Policy, Elsevier, vol. 58(C), pages 295-302.
    16. Sokona, Youba & Mulugetta, Yacob & Gujba, Haruna, 2012. "Widening energy access in Africa: Towards energy transition," Energy Policy, Elsevier, vol. 47(S1), pages 3-10.
    17. Matthew Odedokun, 2003. "Economics and Politics of Official Loans versus Grants: Panoramic Issues and Empirical Evidence," WIDER Working Paper Series DP2003-04, World Institute for Development Economic Research (UNU-WIDER).
    18. Smith, Adrian & Stirling, Andy & Berkhout, Frans, 2005. "The governance of sustainable socio-technical transitions," Research Policy, Elsevier, vol. 34(10), pages 1491-1510, December.
    19. Jeremy Bulow & Kenneth Rogoff, 2005. "Grants versus Loans for Development Banks," American Economic Review, American Economic Association, vol. 95(2), pages 393-397, May.
    20. Sovacool, Benjamin K. & Dworkin, Michael H., 2015. "Energy justice: Conceptual insights and practical applications," Applied Energy, Elsevier, vol. 142(C), pages 435-444.
    21. Hirmer, Stephanie & Cruickshank, Heather, 2014. "The user-value of rural electrification: An analysis and adoption of existing models and theories," Renewable and Sustainable Energy Reviews, Elsevier, vol. 34(C), pages 145-154.
    22. World Bank, 2019. "Doing Business 2019," World Bank Publications - Books, The World Bank Group, number 30438.
    23. Zerriffi, Hisham & Wilson, Elizabeth, 2010. "Leapfrogging over development? Promoting rural renewables for climate change mitigation," Energy Policy, Elsevier, vol. 38(4), pages 1689-1700, April.
    24. Simon Zadek, 2011. "Beyond climate finance: from accountability to productivity in addressing the climate challenge," Climate Policy, Taylor & Francis Journals, vol. 11(3), pages 1058-1068, May.
    25. Islar, Mine & Brogaard, Sara & Lemberg-Pedersen, Martin, 2017. "Feasibility of energy justice: Exploring national and local efforts for energy development in Nepal," Energy Policy, Elsevier, vol. 105(C), pages 668-676.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ogundiran Soumonni & Kalu Ojah, 2022. "Innovative and mission‐oriented financing of renewable energy in Sub‐Saharan Africa: A review and conceptual framework," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 11(1), January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Johansson, Pernilla, 2009. "Grants to needy countries? A study of aid composition between 1975 and 2005," Working Papers 2009:19, Lund University, Department of Economics.
    2. Almeshqab, Fatema & Ustun, Taha Selim, 2019. "Lessons learned from rural electrification initiatives in developing countries: Insights for technical, social, financial and public policy aspects," Renewable and Sustainable Energy Reviews, Elsevier, vol. 102(C), pages 35-53.
    3. Leimbach, Marian & Roming, Niklas & Schultes, Anselm & Schwerhoff, Gregor, 2018. "Long-Term Development Perspectives of Sub-Saharan Africa under Climate Policies," Ecological Economics, Elsevier, vol. 144(C), pages 148-159.
    4. Daniel Cohen & Pierre Jacquet & Helmut Reisen, 2007. "Loans or Grants?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 143(4), pages 764-782, December.
    5. Mandelli, Stefano & Barbieri, Jacopo & Mereu, Riccardo & Colombo, Emanuela, 2016. "Off-grid systems for rural electrification in developing countries: Definitions, classification and a comprehensive literature review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 58(C), pages 1621-1646.
    6. Kirchhoff, Hannes & Strunz, Kai, 2019. "Key drivers for successful development of peer-to-peer microgrids for swarm electrification," Applied Energy, Elsevier, vol. 244(C), pages 46-62.
    7. Solomon P. Nathaniel & Festus V. Bekun, 2020. "Electricity Consumption, Urbanization and Economic Growth in Nigeria: New Insights from Combined Cointegration amidst Structural Breaks," Research Africa Network Working Papers 20/013, Research Africa Network (RAN).
    8. Fortier, Marie-Odile P. & Teron, Lemir & Reames, Tony G. & Munardy, Dynta Trishana & Sullivan, Breck M., 2019. "Introduction to evaluating energy justice across the life cycle: A social life cycle assessment approach," Applied Energy, Elsevier, vol. 236(C), pages 211-219.
    9. Muhammad Shahbaz & Mete Feridun, 2012. "Electricity consumption and economic growth empirical evidence from Pakistan," Quality & Quantity: International Journal of Methodology, Springer, vol. 46(5), pages 1583-1599, August.
    10. Joshi, Lalita & Choudhary, Deepak & Kumar, Praveen & Venkateswaran, Jayendran & Solanki, Chetan S., 2019. "Does involvement of local community ensure sustained energy access? A critical review of a solar PV technology intervention in rural India," World Development, Elsevier, vol. 122(C), pages 272-281.
    11. Jos Alberto Fuinhas & Ant nio Cardoso Marques & Alcino Pinto Couto, 2015. "Oil-Growth Nexus in Oil Producing Countries: Macro Panel Evidence," International Journal of Energy Economics and Policy, Econjournals, vol. 5(1), pages 148-163.
    12. Marchesi, Silvia & Missale, Alessandro, 2013. "Did High Debts Distort Loan and Grant Allocation to IDA Countries?," World Development, Elsevier, vol. 44(C), pages 44-62.
    13. Sheilla Nyasha & Yvonne Gwenhure & Nicholas M Odhiambo, 2018. "Energy consumption and economic growth in Ethiopia: A dynamic causal linkage," Energy & Environment, , vol. 29(8), pages 1393-1412, December.
    14. Gritli, Mohamed Ilyes & Charfi, Fatma Marrakchi, 2023. "The determinants of oil consumption in Tunisia: Fresh evidence from NARDL approach and asymmetric causality test," Energy, Elsevier, vol. 284(C).
    15. Dagher, Leila & Yacoubian, Talar, 2012. "The causal relationship between energy consumption and economic growth in Lebanon," Energy Policy, Elsevier, vol. 50(C), pages 795-801.
    16. Shan Zhou & Douglas S. Noonan, 2019. "Justice Implications of Clean Energy Policies and Programs in the United States: A Theoretical and Empirical Exploration," Sustainability, MDPI, vol. 11(3), pages 1-20, February.
    17. Cerdeira Bento, João Paulo, 2014. "The determinants of CO2 emissions: empirical evidence from Italy," MPRA Paper 59166, University Library of Munich, Germany.
    18. Santos, Carlos Filipe & Fuinhas, José Alberto & Marques, António Cardoso, 2014. "O nexus energia-crescimento e o nível da auto-suficiência na produção de petróleo: análise com macro painel [Energy-growth nexus and oil self-sufficiency: macro panel analysis]," MPRA Paper 57008, University Library of Munich, Germany.
    19. Suberu, Mohammed Yekini & Mustafa, Mohd Wazir & Bashir, Nouruddeen & Muhamad, Nor Asiah & Mokhtar, Ahmad Safawi, 2013. "Power sector renewable energy integration for expanding access to electricity in sub-Saharan Africa," Renewable and Sustainable Energy Reviews, Elsevier, vol. 25(C), pages 630-642.
    20. Nguyen, Trung Thanh & Nguyen, Thanh-Tung & Hoang, Viet-Ngu & Wilson, Clevo & Managi, Shunsuke, 2019. "Energy transition, poverty and inequality in Vietnam," Energy Policy, Elsevier, vol. 132(C), pages 536-548.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:climat:v:161:y:2020:i:2:d:10.1007_s10584-019-02644-x. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.