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article imagePublic finance for energy in Africa focuses on fossil fuels

By Karen Graham     Jul 23, 2018 in World
A recent analysis shows the majority of public aid for energy projects in Africa has been channeled into fossil fuels, causing some to accuse governments of jeopardizing clean energy development to ensure their own financial gain.
The Washington, D.C.-based clean energy advocacy group, Oil Change International is a research, communications, and advocacy organization focused on exposing the true costs of fossil fuels and facilitating the coming transition towards clean energy.
In a study released this month, the group estimated aid to Africa’s energy sector was $59.5 billion (£45.3 billion) between 2014 and 2016. However, 60 percent of public aid for energy projects was spent on fossil fuels, compared with just 18 percent on renewables, reports The Guardian.
And it is interesting to note that almost half of that $59.5 billion went to three countries in Africa - Egypt, Angola and South Africa.
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Oil Change International
But perhaps most striking was the discovery that wealthy governments moving away from fossil fuels while developing clean energy resources at home are continuing to fund fossil fuel projects in Africa, even while thousands of people are without electricity and suffering some of the greatest impacts from climate change.
And even looking at the 18 percent of funds that went to renewable energy in Africa, roughly a third of this clean energy finance went to financial intermediaries – including banks, funds or facilities – to support renewable energy.
And the report is very specific in identifying who benefits from this clean energy financing: "Much of the bilateral public finance for energy in Africa appears to support the commercial interests of the countries providing the finance. In part, this is because a third of the finance assessed in this analysis comes from export credit agencies, which aim to support home-country companies to secure business overseas."
Examining those behind the financing
A number of regional and multilateral development banks and 10 countries were examined in the study. China, who professes to be a leader in climate change at home, gave US$5 billion, of which 88 percent went to fossil fuel development. It also appears that China did not finance any renewable energy projects on the continent during the time period covered.
The next biggest investors were the World Bank Group (WBG), Japan and Germany. However, the WBG denies the estimates. A spokesperson for the group said the WBG is “on track to provide the total projected investment needed in off-grid solar home systems for the developing world over the next four years”, having financed a quarter of mini-grid projects in developing countries.
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Oil Change International
The report claims that less than 2 percent of aid given to the continent’s energy sector went towards renewables or small-scale decentralized energy projects. and this is really sad.
Mohamed Adow, international climate change lead at Christian Aid, said: “These countries are using their aid budgets to promote development in Africa on one hand, while their climate change-causing subsidies cancel out these gains with the other. Rich countries must stop pushing their dirty energy on Africa and use their wealth to provide energy that is clean, green and will serve Africa and the world for years to come.”
And here is something else to think about - The NGO Tearfund, which calls for more renewable energy, found that almost 700 million people - mainly in sub-Saharan Africa, would still be without electricity in 2030.
“When deciding on energy projects in Africa, the most important question should be: is this project in the best long-term interests of the people? Governments should improve transparency around contracts, financing terms, and energy planning, and engage in more meaningful dialogue with civil society to address this question,” said Thuli Makama, Senior Advisor for Africa at Oil Change International, according to Common Dreams.
More about Investment, Clean energy, Fossil fuels, Africa, financial gains
 
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