Methodology, Data Notes and Definitions
The research underpinning this 2022 edition is based on the production of as comprehensive and robust a dataset as possible comprising commitments and disbursements to SDG7-compliant projects in Africa for the period 2014-2020 from public donors, African national governments and development institutions and the private sector. However, it is important to note that this dataset is by no means complete, thereby reflecting the dispersed and disparate nature of data on the African continent. All EU member state and OECD member financing has been captured, but limited data is available for other actors, including African development banks and other multilateral organisations.
The dataset is built on project-level data to the greatest extent possible. This approach ensures that double-counting is avoided. In some cases, project-level information is unavailable, at which point aggregated data published by credible organisations is used, if not already captured.
Given that contributions towards SDGs are of a certain qualitative standard, only public finance classified as ODA or Other Official Flows is included. Non-ODA finance (such as export credit) is omitted, as are public financial flows where the levels of concessionality are opaque. Public finance data for 2014-2020 is sourced from the OECD DAC’s Creditor Reporting System (CRS). Due to this, the 2022 report uses OECD-defined categories, despite their not precisely matching those used by the SDGs. The OECD methodology for categorising ODA changed in 2019. Prior to this date, the face value of concessional finance, which met certain criteria, was classified as ODA, whereas from 2019 onwards, only the ‘grant equivalent’ of this finance is classed as ODA. For comparability across the study period, and due to the lack of grant equivalent data reported by donors, this 2022 report uses the previous definition of ODA for the entire study period.
Data on non-OECD member financial flows is not always published and often lacks detail. There is also no comprehensive dataset on private sector investment in energy and, as such, data has been sought from a number of sources, including the World Bank’s Private Participation in Infrastructure database, a number of industry associations, including GOGLA, and the African Mini-grid Developers Association, Bloomberg New Energy Finance’s Climatescope, and African Energy Live Data, among others.
Very limited information is available in the OECD DAC CRS as to which SDG (if any) an investment is targeted. This data has only been provided since 2017 and few donors submit this information. To remedy this, OECD and private data, which is not specified as SDG7, is assumed to be so, if it is directed at the following sectors: renewable energy (RE), transmission and distribution (T&D), energy efficiency, clean cooking and clean transport.
While not directly contributing towards SDG7, support for policy and capacity-building by means of technical assistance is reported, due to it being an important enabler for additional investment into SDG7.
The 2022 report endeavours to obtain African national government spending exclusive of recurrent expenditure, however, in some countries, only total departmental spending is available. Furthermore, while budget reporting has improved markedly in recent years, it is still not possible to identify SDG7-only spending. The spending reported may, therefore, include non-SDG7 investments.
Definition of SDG7 financing
- all public funds (ODA and Other Official Flows) and private finance that aligns with OECD DAC sector codes for sustainable energy
- SDG7 as defined above including policy and capacity building
- defined as all (SDG7, policy and capacity building and non-SDG7) finance directed to Africa between 2014 and 2020.
- finance directed to projects that do not align with OECD DAC sector codes, or where the finance type or origin could not be identified.
Official Development Assistance
With the exception of African national government spending and investments made by Africa-based development banks, only public funding classified as ‘Official Development Assistance’, as defined by the OECD, has been included. To ensure consistency and comparability across the study period, the face value of ODA commitments or disbursements has been reported. This is despite a change to the OECD methodology whereby only the ‘grant element’ of an ODA grant, loan or equity investment is considered as ODA from 2019 onwards.
Official development assistance flows are defined as those flows to countries and territories on the DAC List of ODA Recipients and to multilateral development institutions which are:
Provided by official agencies, including state and local governments, or by their executive agencies and each transaction of which is administered with the promotion of the economic development and welfare of developing countries as its main objective and is concessional in character.
In DAC statistics, this implies a grant element of at least:
- in the case of bilateral loans to the official sector of LDCs and other LICs (calculated at a rate of discount of 9%),
- in the case of bilateral loans to the official sector of LMICs (calculated at a rate of discount of 7%),
- in the case of bilateral loans to the official sector of upper middle-income countries (UMICs) (calculated at a rate of discount of 6%), and
- in the case of loans to multilateral institutions (calculated at a rate of discount of 5% for global institutions and multilateral development banks, and 6% for other organisations, including sub-regional organisations).
ODA data collection
A robust and verified dataset based on project-level information was compiled for this report. The use of project-level data allows disaggregation and minimises the risk of double-counting. ODA from bilateral and multilateral international financial institutions for 2014 to 2020 was sourced from the OECD DAC Creditor Reporting System (CRS). This data – which includes both commitments and disbursements – was provided by donors and verified by the OECD DAC. Private development finance from private sector charities, foundations and philanthropic organisations, which was classified as ODA, was also obtained from the OECD DAC CRS. Data from non-OECD members (such as China, Brazil, Turkey, etc.) was obtained from various open sources, including development agency websites, along with the monitoring of news-flow and official reports. None of the data collected from these sources was proven to be ODA-compliant and was therefore not used in the analysis of SDG7 financing.
Export credit issued by China, India and South Korea was obtained, but was excluded as it is not ODA-compliant and therefore not con¬sidered SDG7-compliant. Export credit from the Export-Import Bank of the United States was unavailable, while export credit from EU institutions and member states has also not been captured.
Private sector data
Data on private sector operations is limited. Information was obtained from the World Bank’s Private Participation in Infrastructure (PPI) database, which reports on private and public investments into energy projects which reached financial close during the 2014-2020 period. This information was cross-referenced using the OECD DAC CRS, the African Energy Live Data platform, and Bloomberg New Ener¬gy Finance’s Climatescope.
Further data on private finance was obtained from industry associations, where possible. However, this often did not include private equity investments, nor was it possible to allocate investments made directly into globally-focused companies which were active in Africa.
In all cases, the financing of private sector projects was disaggregated so that only private sector contributions were counted, thereby avoiding double-counting where public support was already included within the OECD DAC CRS.
African national government spending
Data was obtained from official documents, including official gazettes, budget reports and speeches. Where possible, only capital expenditure for energy was counted. In some cases, it is impossible to disaggregate spending be¬tween energy and water where a country has a joint ministry. It is also not possible to identify capital expenditure which is SDG7-compliant. As a result, all capital expenditure for energy is included within this report.
African national governments: Sovereign governments of African Union member states.
Africa-based development banks: African Development Bank (AfDB), Banque Ouest Africaine de Développement (BOAD), Development Bank of Southern Africa (DBSA), East African Development Bank (EADB), ECOWAS Bank for International Development (EBID), Trade and Development Bank of eastern and southern Africa (TDB).
EU Institutions and Member States: European Union financial institutions (including European Commission and associated funds and the EIB), and ministries/development agencies/ development banks of its member states as of 31st December 2020 (Austria, Belgium, Bulgaria, Croatia, Cyprus, Czechia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, United Kingdom (2014-2019).
Other Europe (non-EU member states): Countries geographically located within Europe, but which are not a member state of the European Union as of 31st December 2020.
Middle East: Countries within the Middle East and the Levant. Asia: Countries located geographically within Asia.
Oceania: Countries located geographically within the continent of Oceania.
North America: Canada, Mexico and the Unit¬ed States of America.
South America: Countries located geographically within the continent of South America.
Private sector: Any finance from private sector organisations (excluding state-backed commercial banks, or state-owned organisations in China).
Multilaterals: Multilateral development finance institutions, or development banks funded by multiple countries, regardless of geography. This category includes organisations, such as the World Bank, Islamic Development Bank and the Arab Bank for Economic Development in Africa, but excludes multilateral institutions based in Africa.
The sectors and subsectors by which financing was aggregated were based on those used by the OECD DAC to ensure comparability and consistency.
The reporting of SDG7-compliance was extremely limited within the OECD DAC CRS. Therefore, only projects in the sectors of RE, T&D, energy efficiency, clean cooking and clean transport were considered SDG7-compliant. Non-renewable generation was excluded from the SDG7 category, unless indicated as SDG7-compliant by the reporting donor. Commitments and disbursements to policy support and capacity-building are directly related to the achievement of SDG7, albeit the portion attributed to SDG7 is unknown. Despite this, policy support and capacity-building is included as SDG7-compliant unless stated otherwise.
Countries are grouped into regions as per the African Union categorisation, and by income group as per the World Bank categorisation.
Currency and exchange rate
All amounts contained within this report are expressed in current prices. All values are converted to euros based on the average annual exchange rate of the year a particular commitment or disbursement was made. Exchange rates for OECD DAC members was sourced from the OECD, while African currencies were obtained from the AfDB. Annual exchange rates were calculated based on the average exchange rate for the first day of each month of that year.
Data on grant equivalents (the monetary value of a grant or loan which is ‘granted’ via the level of concessionality) was limited and, where available, was obtained from the OECD DAC CRS for 2015 to 2020. The grant element (the percentage of a grant or loan which is ‘granted’) was calculated on a project-level basis, with an average then taken on all grant elements for a donor category. A complete methodology is published separately.