Abstract
This book presented investment risks associated with the sub-Saharan African clean energy industry and an overview of risk mitigation strategies and innovative financing schemes available to public and private players, while focusing on the power and clean cooking sectors and specific energy resources. Starting from this basis, we identified the following areas for future work: (i) the quantification of investment risks; (ii) the selection of risk mitigation actions and their impact on the cost of capital; (ii) the exploration of additional sectors and energy resources; (iv) an in-depth analysis of subsidy reforms.
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This book presented investment risks associated with the sub-Saharan African clean energy industry and an overview of risk mitigation strategies and innovative financing schemes available to public and private players, while focusing on the power and clean cooking sectors and specific energy resources.
Starting from this basis, we identified the following areas for future work:
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Quantification of investment risks
This book described specific investment risks linked to the power and clean cooking sectors. Even though they are all relevant in the sub-Saharan African context, some may be seen as critical by investors, while other may be considered as secondary. In addition, the risk perception may vary from one place to another.
Accordingly, a quantification of investment risks, from the perception of different capital providers and based on specific contexts, may help the public and private sectors effectively allocate their resources where most needed, in order to improve the risk-reward profiles of clean energy initiatives.
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Selection of risk mitigation actions and their impact on the cost of capital
It is important to take into consideration socio-economic and cultural factors to select and implement an effective and efficient set of tools aimed at mobilising affordable capital in the clean energy sector.
Accordingly, in-depth analysis for specific case studies should be realised at a country level, with the objective to define a tailor-made strategy for each country across sub-Saharan Africa. This may involve the consultation of all relevant stakeholders as well as including an analysis of where does the public money come from (taxpayers, national budget, international donations, etc.).
In addition, each analysis should include the impact of risk mitigation actions on the cost of capital. Here again, a specific research should be realised for each country, as the risk perception is context-dependent and may significantly vary from country to country.
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Sectors and energy resources
In order to foster the financing of a fair energy transition in sub-Saharan African countries, more sectors should be analysed, such as transportation, energy efficiency, heating and cooling.
Moreover, other interesting energy resources may be considered (i.e. nuclear power, advanced biofuels) that also have the potential to tackle the clean energy access challenge across the region and facilitate the transition towards a low-carbon economy.
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Subsidies
This book presented an outline of the opportunities and challenges associated with public subsides. However, further work on analysing the impact of (fossil fuel) subsidies as well as possible approaches to effectively implement subsidy reforms in developing and emerging economies may significantly improve the attractiveness of clean energy investments.
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Michoud, B., Hafner, M. (2021). Further Areas of Work. In: Financing Clean Energy Access in Sub-Saharan Africa. SpringerBriefs in Energy. Springer, Cham. https://doi.org/10.1007/978-3-030-75829-5_11
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DOI: https://doi.org/10.1007/978-3-030-75829-5_11
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Publisher Name: Springer, Cham
Print ISBN: 978-3-030-75828-8
Online ISBN: 978-3-030-75829-5
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