Sub-Saharan Africa’s Renewable Energy Journey: Commitments, Challenges and Financial Flows – Report

Sub-Saharan Africa has seen significant regional commitments to renewable energy, driven both by historical long-term planning and recent declines in the costs of technologies that have made renewable energy more competitive with conventional sources. These efforts have been underpinned by broader development plans such as Agenda 2063: The Africa We Want, which emphasizes inclusive and sustainable economic growth, continental and regional integration, democratic governance, and peace and security.

At the regional level, dedicated centres have been set up to support the transition to renewable energy and energy efficiency. These centres work with member countries, donor agencies and international institutions to develop energy plans and roadmaps. For example, West Africa aims to increase the share of renewable energy in its energy mix to 48% by 2030, up from 35% in 2020. Similarly, Southern Africa has set targets to achieve a 39% share of renewable energy by 2030, up from 33% in 2020. However, these targets are not binding and require rapid translation into effective national policies to ensure their credibility and to deliver the promised benefits.

North African countries have also set ambitious renewable energy targets at the national level. They have established the Regional Center for Renewable Energy and Energy Efficiency (RCREEE) in cooperation with other members of the League of Arab States. The Pan-Arab Sustainable Energy Strategy – 2030, which was expanded from the Pan-Arab Renewable Energy Development Strategy 2010-2030, aims to achieve a 12.4% share of renewable energy in the energy mix. The strategy includes an implementation plan with 17 programs, focusing on shifting Arab electricity markets towards a higher share of renewable energy, securing necessary investments, mitigating risks and integrating smart services and quality assurance schemes.

In West Africa, the ECOWAS Renewable Energy Policy (EREP), adopted in July 2013, sets targets to increase the share of renewable energy in the region’s energy mix to 35% by 2020 and 48% by 2030. This policy is complemented by the ECOWAS Energy Efficiency Policy, which aims to deliver 2,000 MW of generating capacity through efficiency improvements. Following the adoption of these regional policies, all ECOWAS member states developed national renewable energy action plans and national energy efficiency action plans for 2014–2015, aligned with the regional targets declared in the EREP.

Public financial commitments play a key role in supporting renewable energy projects in sub-Saharan Africa, given the challenges in attracting private capital due to financial, political, legal and economic risks. Between 2000 and 2021, public financial institutions committed almost $60 billion to renewable energy, with significant investments in hydropower, solar, wind and geothermal projects. The largest commitments came from China, the International Development Association, the United States and the International Bank for Reconstruction and Development. These investments go beyond energy assets to include feasibility studies, technical assistance and training.

Public financial flows, particularly from international donors and financial institutions, have effectively catalysed private investment in the energy sector. Investment funds and development finance institutions (DFIs) have played a key role in this process. West Africa received US$17.5 billion in public commitments between 2010 and 2021, mainly for hydropower and solar projects. Similarly, East Africa received US$17 billion, with significant investments in hydropower, solar, geothermal and wind projects. Central Africa has also seen an increase in public commitments for renewable energy, particularly in hydropower and solar projects.

To support the next phase of off-grid renewable energy development, low-cost local currency financing will be preferred. Established companies are looking to finance the next phase of development, while younger companies would benefit from cheap capital to build profitable businesses and attract equity investors. In the absence of such financing, the burden could fall disproportionately on low-income households as companies struggle to maintain profitability and healthy cash flows.

Tapping into Sub-Saharan Africa’s largely untapped renewable potential can help overcome the energy deficit and create a more inclusive and sustainable energy system. The region has received significant renewable energy commitments at regional, national and city levels. However, implementing these commitments requires effective translation into national policies, mobilisation of international public finance and integration of renewable energy solutions into infrastructure development plans.

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