Funding Africa’s Just Energy Transition: Changing Unjust Economic Rules to Build a Publicly-led Renewable Energy Future
Africa has enormous potential to build renewable energy systems that advance energy access, economic development and climate resilience. Yet, the finance needed to realise this potential is not reaching the continent at the scale, cost, or speed required.
This briefing examines the structural barriers that constrain finance for Africa’s just energy transition, including high borrowing costs, debt pressures, unequal access to international public finance, limitations in blended finance, and global tax and financial rules that continue to constrain African economies.
The persistent shortfall in funding for a just energy transition highlights the injustices at the heart of our global economic order. This outdated and unequal economic order favours Global North countries at the expense of the Global South, undermining Africa’s economic sovereignty and development.
Despite this, African governments are already leading the charge. They are championing the creation of a UN Framework Convention on International Tax Cooperation and a parallel framework on sovereign debt. The African Union has launched an African Credit Rating Agency to provide an alternative to a system dominated by Global North-based rating agencies.
Key Findings:
- Africa needs at least $217 billion annually for renewable energy generation, transportation, and universal energy access. Yet, only 21% of the estimated annual finance needed is reaching the continent.
- Changing international financial rules as well as integrating regional and domestic reforms could unlock $367 billion in public finance annually.