Non-European Financial Flows
The global sources of financing for African energy projects have changed markedly in the last couple of decades, reflecting the emergence of new actors beyond the traditional OECD players. This trend has clearly diversified the sources of funding, equipment and know-how coming into Africa.
Multilaterals and other funds have played a significant role in financing Africa’s energy sector, where it was found that some EUR 8.4 billion has been committed by various non-EU, non-African Multilateral Development Banks (MDBs) and their funds to SDG7 in Africa during 2014-2019. Identified commitments have risen from EUR 414 million in 2014 to EUR 3 billion in 2018, although fell back to EUR 1.6 billion in 2019. This is broadly in line with the wider increases in funding directed at the continent and reflects the fact that these multilaterals have generally accounted for around 34% of global ODA funding to SDG7. The European Financial Flows on SDG7 to Africa 2020 report found that up to 53% of the funding of MDBs made by OECD members were provided by EU Member States.
The United States has increased its focus on Africa over the past decade; the Obama administration’s Power Africa initiative was launched in 2013 and the Prosper Africa initiative in 2019. While identified financial flows from the US may not match its status as the world’s largest economy, an increasing amount of grant funding has been committed. However, at 21% this still lags behind the EI & MS support, which accounted for 54% of all grant funding of SDG7 projects in Africa from 2014-2019.
Other notable sources of identified funding are the Middle East and Asia, which account for 6% and 5% of all ODA funding to SDG7 projects since 2014, respectively. However, the overwhelming majority of this appears to have been extended in the forms of loans.
The People’s Republic of China has emerged as a major financier of African infrastructure in recent years, with as much as EUR 34.6 billion in financing flows identified since 2014. However, the contributions to SDG7 made by China and other emerging actors such as Brazil and India is unquantifiable in the absence of official reporting and other issues. These actors are not members of the OECD (with the governance and reporting commitments that implies); its data is unreliable, with inadequate transparency around the levels of (or lack of) concessionality of this funding, and no indications as to whether finance is SDG7 compliant. As such, it was not possible to identify any qualifying financing of SDG7 in Africa over the period under review.