It is widely acknowledged that clean and safe electricity is critical to sustainable development in sub-Saharan Africa’s rapidly evolving cities. Prevailing electricity services across the region are inadequate, expensive and unreliable. Those households that are grid-connected in sub-Saharan African countries pay up to three times more than comparable households on other continents (AfDB, 2018) and almost all electricity grids in Africa experience frequent outages. Expensive and unreliable power in Africa is estimated to cost 2%-4% of GDP and is often cited as the cause of Africa’s inability to make industrial progress (APP, 2015; Azolibe & Okonkwo, 2020). In addition, the electricity deficit underpins a horrendous humanitarian and environmental burden. An estimated 400 million people in sub-Saharan African countries continue to rely on energy feedstocks that cause deforestation and indoor pollution. Fisher et al. (2021) reported that 1.1 million Africans, half of them children under the age of five, died from air pollution in 2019.
Less widely documented or acknowledged are the reasons why financing sub-Saharan Africa’s electricity has been so difficult and why deficits remain despite numerous programmes and the availability of household budgets ($10 billion per annum by some estimates) for inferior electricity substitutes such as batteries, candles and paraffin. Too easily the technocratic demands of electrification and the default of finance to seek out familiar, low risk, high return opportunities, combine to deliver electricity projects, but not the flow of safe electricity that is able to drive sustained, inclusive progress. The concentration of political and fiscal power in national, as opposed to city governments, and the vested political interests in large vertically integrated electricity utilities, contribute to the unsatisfactory outcomes.
Transcending facile prescripts for sub-Saharan Africa’s electricity finance deficit depends on understanding the conflation of interests, incentives and transactions at multiple scales, which makes this nightmare so difficult to dislodge. Despite this perspective, the paper strikes an optimistic note, identifying the confluence of current disruptions at multiple scales as an opportunity to break the deadlock on sub-Saharan Africa’s electricity finance and provide the estimated $68 billion per annum over the next two decades required to ensure universal access to safe electricity in sub-Saharan Africa. Applying a socio-technical analysis, the paper identifies shifts at global, regional and local scales that now make it easier to extend sustainable electricity finance (Geels et al., 2016).
These include the following.
– Technological progress that enables a shift away from large, long-lived sunk investments that were the exclusive responsibility of national governments, towards smaller scale electricity solutions financed by a variety of actors.
– Innovations in renewable energy that have driven an 85% drop in the price of photovoltaic electricity and a 70% drop in the price of onshore wind between 2010 and 2020, and made these forms of electricity cheaper than alternatives.
– The linking of this electricity to digitalised payment systems that has improved tariff setting, enabled revenue collection and led to the proliferation of mini-grids and smart-grids capable of integrating multiple sources of electricity.
– The urbanisation of sub-Saharan Africa’s population that has concentrated demand for household electricity and industrial power in financially viable geographical hubs.
Implicit in the paper is a challenge to financiers to think more systemically about the risks and opportunities associated with universal access to sustainable electricity, and a warning to electricity sector incumbents that fail to appreciate the scale of the technology revolution that is already underway. For those African countries that have historically struggled to raise electricity finance, build the infrastructure, access the feedstocks and collect revenue from electricity users in order to service the costs, the current disruption offers hopeful prospects for multi-nodal, clean power sources, owned cooperatively and distributing reliable, safe and affordable electricity to every household, factory and business on the continent. Taking advantage of the current set of circumstances is not without risks for financiers, electricity utilities, their employees and electricity users, but it is necessary if global finance is to support the sustainable development goals.