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Rethinking Energy Transition Finance in Africa: Towards a Regional Market and Policy Framework
0₦2,500.00Africa, as a continent, faces a challenge of energy poverty in large part due to the existence of enormous and yet untapped renewable energy resources. Admittedly, the continent has made significant progress in transitioning towards cleaner and more sustainable energy systems. However, due to the enormous financial investment needed, energy transition has moved at a rate that is significantly lower than what is required. Desmond Ogba, in his article, Rethinking Energy Transition Finance in Africa: Towards a Regional Market and Policy Framework, argues that the challenge associated with energy transition financing in Africa is the high cost of renewable energy projects, which is further exacerbated by the fragmented, project-by-project financing model currently employed on the continent. Ogba conceptualises a sui generis mechanism that has the potential to serve as an effective financing vehicle for large-scale, sustainable energy transition projects in Africa. It employs a doctrinal methodology that is informed by examining applicable legal frameworks, policy instruments, and existing literature on the subject of energy transition financing. Ogba examines existing financing models driving Africa’s energy transition projects, ascertains structural limitations in these models, and assesses their effectiveness in driving Africa’s energy transition projects. Ogba concludes by proposing a regional financing architecture that will blend public and private capital, deploy sophisticated risk mitigation instruments, and proactively build the market infrastructure needed to attract investment at scale. It posits that for Africa to unlock its renewable energy potential, it is not only necessary to increase funding pledges for renewable energy projects but also to re-engineer and restructure Africa’s capital mobilization.