Title
Financial de-risking to unlock Africa's renewable energy potential
Author
Sweerts, B.
Dalla Longa, F.
van der Zwaan, B.C.C.
Publication year
2019
Abstract
African countries are in a unique position to reap the socio-economic and environmental benefits of renewable resources as a means for meeting increasing energy demand in a sustainable way. A critical obstacle for the deployment of renewable energy technologies in Africa is the difficulty of attracting sufficient and affordable finance. This paper compares the impact of financial conditions on the cost of electricity generation across six renewable and three fossil-based technologies in 46 African countries. The results show large cost variations and highlight the extent to which renewables are disadvantaged by current financial practices. The energy-economyenvironment model TIAM-ECN is used to show how lowering financing costs results in a much higher deployment of renewables. For example, solar PV could account for 10–15% of total electricity generation by 2050, even without explicit climate policy, thanks to financial de-risking programmes. The results demonstrate that changes in financing schemes could outweigh the impact of technology learning. This paper also demonstrates that, once ambitious climate policies are in place, reducing financing costs for renewables could be an efficient way to lower greenhouse gas emissions. Financial de-risking is thus a key ingredient for unlocking the renewable energy potential in Africa.
Subject
Renewable energy
Finance
Risk reductions
Climate change
Africa
Energy Efficiency
Energy / Geological Survey Netherlands
To reference this document use:
http://resolver.tudelft.nl/uuid:c07d71ec-0894-41a5-b6d9-73c85d5ca145
TNO identifier
844028
Publisher
Elsevier, Amsterdam
Source
Renewable and Sustainable Energy Reviews, 102 (102), 75-82
Document type
article