Energy poverty remains prevalent in many African countries, hindering economic development and exacerbating social inequalities. Simultaneously, population growth throughout the continent is expected to perpetuate the already high demand for basic energy services into the coming decades. Private sector finance is increasingly regarded as a necessary ingredient to remedy Africa’s energy challenges and to stimulate the adoption of renewable energy. However, investments remain insufficient for the burgeoning infrastructure requirements of the African economies. This paper seeks to delineate the financial and non-financial drivers of investment decisions to understand better the barriers to private participation in African renewable energy projects. Using a fuzzy Technique for Order Preference by Similarity to Ideal Solution (TOPSIS) approach, we evaluate country-level characteristics and their influence on investor decisions. Investor confidence in regulatory effectiveness is identified as the primary concern for investors. Local capacity building and policy instruments, designed to overcome institutional rigidities, are among the preferred solutions. The findings indicate that non-financial drivers contribute to understanding Africa’s private energy investment challenges.
- Renewable energy
- Multi-criteria decision making