Investment in the Electricity Sector of Africa and Its Role in Overcoming the Continent’s Energy Poverty

Abstract

The aim of the presented study is to analyze the investment in the electricity sector of African states, its volumes and sources, as well as to determine its role and the level of sufficiency to overcome the problem of the continent’s energy poverty. The author concludes that external sources of finance play a key role in the development of Africa’s electricity sector and in the achieved success in electrification. China, international organizations, EU countries and the United States account for more than 80% of capital investments to this important sector of the economy. Large energy companies and banks are entering the promising African markets together with capital, and competition between them is increasing. Nevertheless, the author’s assessment of quantitative data on the expansion of the African population’s access to electricity allows us to state that there is a significant gap in the volume of investments made and required to the industry. The pandemic of the new coronavirus infection, announced in March 2020, will certainly affect global financial flows and is likely to deepen thisgap, which poses an even greater threat to the achievement of the seventh Sustainable Development Goal, namely, ensuring universal access to electricity. Thus, according to the author, in the medium term, the problem of the lack of electricity on the African continent will not be completely resolved and may tend to worsen. In conclusion, the author argues that, given the amount of investment required and the depth of the problem of energy shortages in Africa, the electricity industry is not closed from the entrance of new players and “there is enough room for everyone”. Thus, Russia, possessing modern technologies and experience in the implementation of energy projects abroad, could become a full-fledged and significant player in the promising electricity markets in Africa.