Progress made financing African energy projects but funding gap remains
A new report commissioned by the Africa-EU Energy Partnership (AEEP) and produced by Cross-border Information (CbI)’s African Energy consultancy team has found that significant progress has been made towards reaching the United Nations’ Sustainable Development Goal 7 (SDG7) in Africa, but that significantly more needs to be done if this important goal is to be achieved.
The European Financial Flows on SDG7 to Africa report identified some €108bn of investments into the continent’s energy sector between 2014 and 2019, of which €24.4bn was directed towards SDG7-compliant projects in the form of official development assistance (ODA).
African Governments and development institutions have borne the primary responsibility for energy investments and are responsible for investing some €66.2bn over the period. The report also finds that Europe is the world leader in SDG7-compliant energy investment in Africa, with aggregated data showing that EU Institutions and Member States have committed €11.1bn in ODA during the period under investigation – equal to 46% of all energy ODA investments in the continent.
Despite this progress, an average funding gap of €69bn per year remains, a figure which while substantial, can be leveraged. Merely avoiding the economic losses from electricity outages in Africa would free up the funds required to provide access to sustainable energy services to all of Africa´s citizens. Expressed differently, the additional funding requirement is only 3.1% of African GDP and a mere 0.5% of European GDP.
The report finds that profound intent exists with African governments, European partners and other key international players to reach the SDG7 goal by 2030. However, to ensure access to affordable, reliable, sustainable and modern energy for all, ODA spending and private investments may need to increase by 27% per year over this decade, along with a substantial increase in national government spending.