Harnessing the UN's SE4All Initiative: How ECAs and Multilateral Partners Support Projects in Sub‐Saharan Africa
| DOI | http://doi.org/10.1111/1758-5899.12263 |
| Date | 01 September 2015 |
| Published date | 01 September 2015 |
| Author | George Otieno |
Harnessing the UN’s SE4All Initiative: How
ECAs and Multilateral Partners Support
Projects in Sub-Saharan Africa
George Otieno
African Trade Insurance Agency
Energy access is defined by the ability of a population
to have household access to electricity and clean cook-
ing facilities such as fuels and stoves that do not
cause air pollution in homes. This should be a funda-
mental right. However, this is currently not the case
for 1.3 billion people globally who lack access to elec-
tricity and a further 2.6 billion who lack access to
clean cooking facilities. Sub-Saharan Africa is arguably
one of the hardest hit regions, where two thirds of
the population or 600 million people lack access to
electricity and 730 million rely on solid fuels such as
wood, coal, charcoal or animal waste for cooking and
heating their homes. Businesses are also suffering from
the lack of access to reliable electricity supply. Over 30
African countries experience power shortages and ser-
vice interruptions forcing companies to rely on the
lease of costly generating plants. Power outages also
mean lost sales and damaged equipment amounting
to an average of 6 per cent of turnover for formal
enterprises and 16 per cent for informal enterprises
that are unable to provide their own back-up genera-
tion. The economic cost for countries is also quite high
accounting for as much as four percentage points cut
from annual per capita GDP growth rates (Eberhard
et al., 2008; see also Oseni, 2012).
While Africa suffers disproportionately from the
harmful impact of energy poverty, the impact is not
limited to the region. In fact, climate change and
related economic, social and political impacts are a
global challenge threatening lives everywhere. This is
the premise underlying the UN’s Energy for All (SE4All)
initiative. Launched in 2011, the multi-stakeholder part-
nership teams governments, the private sector and civil
society in an effort to reduce the two greatest inter-
connected challenges relating to energy –energy
access and climate change. The SE4All initiative strives
to achieve three objectives by 2030: ensuring universal
access to modern energy services; doubling the global
rate of improvement in energy efficiency; and doubling
the share of renewable energy in the global energy
mix.
Within this context, Export Credit Agencies (ECAs),
which are government funded institutions that provide
loans and insurance for domestic companies engaging in
international exports, are increasingly organising them-
selves to find solutions on how they can contribute more
meaningfully to the SE4All initiative. As national bodies
supporting and sometimes funding large-scale energy
projects, ECAs recognize that they potentially have the
means at their disposal to positively contribute to the
global dialogue on abating climate change. This article
focuses on ECA led initiatives to support renewable
energy projects with specific reference to climate finance,
defined as any kind of financing channelled by national
and international entities toward activities that reduce
greenhouse gas emissions or that help society adapt to
the impacts of climate change.
Obstacles to launching renewable energy
projects
Locating appropriate financing and then leveraging this
capital for both small and large projects is one of the
greatest challenges facing project developers. In Africa,
the International Energy Agency (IEA) estimates that
$48 billion a year are needed globally through to 2030
to achieve universal energy access (IEA, 2011). In devel-
oping markets, there are many unique hurdles to devel-
oping viable and innovative renewable energy projects.
First, in terms of project development, one of the hur-
dles is size. While large-scale projects generally tend to
dominate and attract the lion’s share of financing, the
fact is that many small-scale projects often provide the
most promising solutions in areas with high levels of
poverty and in rural settings. Private developers
involved in these projects generally require small
amounts of capital to fund early-stage development
components such as engineering, geotechnical or
©2015 University of Durham and John Wiley & Sons, Ltd. Global Policy (2015) 6:3 doi: 10.1111/1758-5899.12263
Global Policy Volume 6 . Issue 3 . September 2015
318
Special Section Article
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