Energy Financing Trends
Total commitments to Africa’s energy sector development in 2017 reached $24.7bn, a significant increase from 2016 when they totalled $20.6bn. Increased financing from China, African state funding and private investors offset the reduction in financing from ICA members, the Arab Coordination Group and the Regional Development Banks.
The biggest increase in the financing of Africa’s energy projects in 2017 came from China. Its commitments rose by 95%, from $4.6bn in 2016 to $9.1bn in 2017, comprising loans (97%) and equity investments (3%).
ICA member commitments of $5.7bn in 2017 were lower than in 2016 ($7.7bn). However, ICA financing remained the second largest contributor to the energy sector, accounting for 23% of total investments. Among ICA members, the World Bank Group contributed the highest amount ($2.7bn), followed by the AfDB ($1.4bn).
African state funding, at both national and sub-national level, also increased – from $4.4bn in 2016 to $5.6bn in 2017. Arab Coordination Group financing for the sector stood at $1.1bn in 2017, down a little on the $1.3bn recorded in 2016. Africa’s regional development banks committed $209m in 2017.
Total energy sector financing by source, 2013-2017
West Africa was the most popular destination for funding with commitments of $8.5bn, representing 34% of the total. This is significantly higher than the commitments for other regions. North Africa received $4.9bn (19.8% of the total), Southern Africa $3.8bn (15%), East Africa $3bn (12%), South Africa $2.2bn (9%), and Central Africa $2.1bn (8%).