The Role of International Institutions in Fostering Sub-Saharan Africa's Electrification

The Role of International Institutions in Fostering Sub-Saharan Africa's Electrification

By Morgan Bazilian and Simone Tagliapietra

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CGEP Fellow Morgan Bazilian and Simone Tagliapietra,senior researcher at the Fondazione Eni Enrico Mattei, discuss the role of international institutions in bringing electricity to sub-Saharan Africa (SSA), a region where two-thirds of the population does not have access to electricity, and the remaining one-third cannot consume as they would like, due to regular blackouts and brownouts.

The authors offer a review of global financing initiatives for SSA’s electrification, finding that the scale and focus across initiatives is wide and eclectic. The EU’s actions appear particularly fragmented, favoring overlaps, inefficiencies, and overall higher transaction costs, while the World Bank Group, the African Development Bank, and the U.S. have streamlined their actions in the field, focusing resources on a few initiatives. The authors also note that China has altogether taken a different approach, targeting their efforts through state owned enterprises, rather than via financial assistance institutions. The commentary stresses that SSA’s energy needs are indeed poorly served by a fragmented system of financial assistance, and coordination between large and smaller funders remains critical.

The commentary concludes by noting that international financial or development institutions need to offer more than financial support to bring electrification to SSA. Increased technical assistance, capacity building, and risk instruments are critical. Better coordination and information-sharing mechanisms to track the rapidly-changing landscape will be critical to achieve SSA energy access goals.