Energy Financing Trends
Africa's energy sector received financial commitments totalling $20bn in 2016, reverting close to the 2014 level ($22.4bn) following the record high of $33.5bn committed in 2015.
ICA members were the largest financiers of energy projects in 2016, with total commitments of $7.7bn (down from $8.6bn in 2015). The World Bank Group ($1.7bn) and Japan ($1.1bn) provided the most commitments from ICA members.
Chinese financing of energy projects, which reached nearly $10bn in 2015, fell to $4.6bn in 2016. Almost half of China’s commitments to the sector were accounted for by two $1.5bn commitments to coal-fired power projects, in Kenya and Ghana.
The decline in private sector participation in energy projects in 2016 was primarily due to the continued hold-up of South Africa’s Renewable Energy Independent Power Producer Procurement (REIPPP) programme. As a result, private sector financing to the energy sector fell to $1.3bn from $7.2bn in 2015.
Total energy sector financing by source, 2013-2016
At $5.6bn, West Africa was the biggest recipient of infrastructure financing in 2016, followed by East Africa, which attracted $5.2bn. Financing levels for both regions were fairly consistent with the previous year. North Africa benefitted from $3.3bn in 2016, while Central Africa, Southern Africa, and the Republic of South Africa received $1.4bn, $1.6bn and $2.1bn, respectively.
Total Energy Financing by region 2016
Loans accounted for 57% of identified project financing for the energy sector in 2016, while 7% of total financing was via lines of credit. Just over 30% of financing was by instruments other than traditional loans, grants, blended finance, export credit, or equity investments.
Energy sector financing by type of funding 2016