The report “Africa’s energy transition and recent geopolitical, political and policy turbulence” by the Oxford Institute for Energy Studies concludes that changes and adjustments in climate policies and regulations in the US and Europe will adversely affect the funding of Africa’s clean energy projects and the continent’s energy transition. The impact of US policy changes will rapidly be felt as US public aid funding is drastically reduced, and US funding of international clean energy programmes and initiatives is stopped. In Europe, the economic, financial, political and geopolitical problems that are forcing the EU to undertake climate policy adjustments will affect the funding of Africa’s clean energy projects.
The European Union continues to state its support of Africa’s clean energy transition. However, the important change in Europe’s financing priorities, especially the urgent need to significantly increase defence spending, will reduce European public funding available for international clean energy projects, including Africa’s. This will accelerate changes in the funding structure of such projects. Private sector investment and lending will become the predominant source of funding and will pose serious challenges for African projects with poor financial viability and bankability. Finally, the policy and regulatory changes and adjustments in the US and Europe could also potentially limit and delay Africa’s decarbonisation and methane emission reduction commitments and, thus, further slowdown the continent’s already complicated energy transition.
Access the report here
