Foreign finance to the rescue? Analysing and re-thinking international electrification initiatives in sub-Saharan Africa

With 650 million unelectrified people, sub-Saharan Africa’s (SSA) energy transition
towards widespread electrification constitutes one of the greatest challenges for achieving the UN’s goal of energy access for all. Over 60 international initiatives have been set up to help advance electrification in SSA. This paper argues that while this external assistance is helping to overcome the crucial finance barrier, it currently operates under five mechanisms which imply novel challenges for the long-term effectiveness of electrifying SSA: (1) finance tends to mainly benefit non-African companies rather than building up a viable, local electrification industry; (2) the rapidly growing number of international stakeholders is decreasing the role and ownership of African governments in electrification; (3) foreign initiatives exhibit a discrepancy between their stated ambitions and their comparably low new installed capacity targets; (4) the initiatives tend to apply generalised, pre-defined policies to highly country-specific circumstances; and (5) finance conditionalities such as free market reforms and subsidy reduction jeopardise state-run programs which help poor people pay for electricity. To address these issues, this papersuggests to re-orientate external finance towards rural electrification, strengthen African ownership structures, increase capacity targets, individualise policies and relax current free-market conditionalities.