Energy Financing Trends
Africa’s energy sector has attracted increased attention from development partners and the private sector in recent years as the continent continues to struggle with low access to electricity and insufficient generation capacity.
The ICA’s flagship annual report Infrastructure Financing Trends in Africa 2015 shows US$34.7bn was committed in 2015 to the development of Africa’s energy sector, a significant rise on the US$22.4bn invested the previous year.
African national government spending of US$6bn was boosted by US$8.6bn of commitments by ICA members, US$12.9bn from non-ICA member countries and multilateral institutions (US$10bn of which was from China), and a further US$7.2bn from the private sector.
Figure 81: ICA member commitments to the energy sector 2011-2015
While commitments by ICA members in 2015 were down by US$545m compared to the 2014 figure, this still represents one of the largest yearly investments in the energy sector once the exceptional US$7bn multi-year pledge in 2013 by the US-initiated Power Africa plan is discounted.
Financing by ICA members of energy projects in the North Africa region fell from over US$4bn in 2014 to US$1.69bn in 2015, behind West Africa (US$2.26bn) and Southern Africa (US$2.22bn). Commitments by ICA members to East Africa increased by 50% to US$1.56bn but funding for Central Africa fell to just US$378m in 2015.
Around half of total energy sector financing during 2015, from all sources, was directed towards Southern Africa, including the Republic of South Africa, largely due to substantial non-ICA member funding. The majority of this came from China (US$7.24bn) and from private sector investments (US$4.57bn), though African national governments also contributed US$1.99bn.
At US$5.4bn, West Africa received the second largest combined financing in 2015 thanks largely to US$2.3bn of ICA member funding and US$1.3bn of non-ICA donor commitments. East Africa received US$5.4bn, North Africa US$5.1bn and Central Africa US$1.4bn.
Figure 82: Total commitments to the energy sector 2014 and 2015