Catalysing investment in sustainable energy infrastructure in Africa: overcoming financial and non-financial constraints
This paper examines the challenges and tensions that arise in financing energy infrastructure in sub-Saharan Africa, using case studies of Tanzania and Zambia to provide a historical perspective. Energy infrastructure investment is crucial to development and poverty reduction across Africa. Given the scale of finance needed, governments are increasingly looking to attract private-sector investment. However, it is clear that building infrastructure does not automatically bring broad-based growth and social development. This paper focuses on how to drive investment in sustainable infrastructure – that is, infrastructure that meets local needs in a socially acceptable, environmentally friendly and equitable manner. It identifies four tensions or challenges that arise in energy infrastructure development: balancing liberalization with regulation and control over resources; achieving attractive risk-return profiles while ensuring access and affordability of services; balancing the push for private-sector investment with effective public investments; and balancing local and national needs with the global sustainable development agenda.