The International Energy Agency (IEA) indicated in a statement that it published on its website the need to improve access to capital and alleviate financing costs to develop renewable energy in Africa.

The second report co-produced by the IEA and the African Development Bank Group (AfDB) mentioned that “it is essential to act quickly to improve access to capital and alleviate financing costs to unlock a flow of clean energy spending in Africa.” The IEA and ADB explain that a series of risks affecting projects in Africa, as well as higher borrowing costs following the Covid-19 pandemic, lead to the existence of “a limited pool” of affordable capital that energy investors in Africa can exploit

This document points out that “this is a small amount in the context of global energy expenditure equivalent to the investment required to build a new LNG terminal per year. But this requires a very different type of financing, given the need for small-scale projects, often in rural areas and for consumers with limited ability to pay.”