Electrification in sub-Saharan Africa: The role of international institutions
Bruegel fellow Simone Tagliapietra contributed to the new issue of the 'Oxford Energy Forum' with an article on the role of international and European financing institutions in fostering the electrification of Africa.
This article was published as part of Oxford Energy Forum – Electrifying Africa – Issue 115
Africa’s access to electricity varies by region: North Africa is almost entirely (99 per cent) electrified; in sub-Saharan Africa excluding South Africa (SSA), electrification rates in most countries are below 30 per cent; and South Africa is predominantly (86 per cent) electrified. Lack of access to electricity in SSA is even more dramatic in rural areas, where electrification rates average 16 per cent, compared to 99 per cent in North African countries and 71 per cent in South Africa.
Since 2014 the number of people without access to power in SSA has declined, as electrification efforts have surpassed population growth. Decentralized renewable-energy solutions play an increasing role in this trend. However, around 590 million people in SSA continue to lack access to power, more than half of the world’s total.
Lack of access is not the only component of SSA’s electrification challenge. Even among people who do have access to electricity, there are wide disparities in annual per capita consumption between the three regions: 225 kilowatt-hours (kWh) in SSA – and as little as 100 kW in rural areas – compared to 1,500 kWh in North Africa and 4,200 kWh in South Africa.
Thus, two-thirds of SSA’s population does not have access to power, while the remaining one-third cannot consume as much as it would like, due to regular blackouts and brownouts resulting from structural problems in the electrical system.
Making power available to all by 2030, in line with the UN Sustainable Development Goals, is therefore a major challenge for Africa, notably for financial reasons.
The International Energy Agency estimates that cumulative investments between 2017 and 2030 under current policies and commitments are less than one-fifth of the amount needed to achieve universal electricity access in SSA, which it estimates at $454 billion, an average of $35 billion per year.
How to meet this substantial investment requirement? The issue is complex, and no simple solution exists. However, two points seem to be essential:
- SSA countries should reform their power sectors to facilitate international investment.
- The international public financing made available for Africa’s electrification should be better used, in order to encourage international private investments in the sector.