Financing the Renewable Energy Transition in Sub-Saharan Africa: A Systematic Review of Investment Instruments, Market Models and Institutional Constraints (Research Square)

Summary

• An initial database search yielded 198 records concerning renewable energy financing in Sub-Saharan Africa.p.2
• A total of 88 outdated or duplicate records were removed prior to screening.p.2
• Screening was conducted on 110 documents, leading to the exclusion of 66 sources due to inadequate information.p.2
• Full texts were retrieved and assessed for 44 eligibility candidates, with 1 study subsequently excluded.p.2
• A final synthesis was conducted across 43 included studies using qualitative thematic analysis.p.2

Key insights

1. Public and concessional capital remains the primary financing driver for renewable energy projects across Sub-Saharan Africa.p.2
2. State-led and donor-supported market models help initiate projects but fail to build competitive or self-sustaining investment environments.p.2
3. High cost of capital, off-taker risk, currency exposure, and weak utility creditworthiness severely restrict private sector bankability.p.2
4. Decentralized systems such as off-grid solar and mini-grids are critical for access but encounter specific regulatory and financing barriers.p.2
5. Institutional credibility directly mediates the effectiveness of financing instruments and impacts capital availability.p.6
6. State-owned utility financial distress and payment delays undermine power purchase agreements and discourage private investments.p.6
7. Long-term market transformation requires systemic reforms, including utility balance-sheet strengthening and local financial market development.p.7