Sustainable Development Goal 7 (SDG7) targets to improve access to clean, affordable, sustainable, and reliable energy; worth noting are the more than 600 million people in sub-Saharan Africa who have no access to electricity and the nearly 900 million who cannot access clean cooking facilities. Currently, low-income households rely on expensive, polluting fuels such as kerosene for lighting as well as firewood and charcoal for cooking. Collecting these fuels requires many hours of unpaid labour for women and children who also suffer disproportionately from the high levels of indoor air pollution generated from their use.

Whilst most donors and concessional finance providers have focused on improving energy access, AECF has also invested in innovative, market driven solutions to providing clean and improved cooking technologies to low-income households. To better understand the contribution of these investments and the current state of play across Africa, AECF undertook a sector review together with the Stockholm Environment Institute (SEI). This reviewed the policy environments in Kenya, Tanzania, Rwanda, Zambia, Ghana and Senegal as well as looking at the investments that AECF has made in ten companies in East Africa.

Funding clean energy in Sub-Saharan Africa

Africa still accounts for only a small share of the global investment in the energy sector. From approximately US$100 billion invested in the energy sector in 2018 (about 5.5% of the global total), US$70 billion was invested in fossil fuels, US$13 billion in renewables, and US$13 billion on electricity networks.

Currently, point of use clean energy options available on the continent include electricity, gas, ethanol, solar, and high-performance biomass stoves. However, Africa relies heavily on traditional biomass for cooking which pose significant health risks. Globally, close to 4 million people die prematurely each year from illness attributable to household air pollution posed by these fuels.

Africa remains fundamentally tied to traditional, polluting cooking technologies as clean fuels remain unavailable and unaffordable and investment lags

Whilst countries in East and West Africa have made tremendous efforts with almost 5 million people gaining access to clean cooking solutions, there is a continuing dependence on traditional biomass and inefficient cooking technologies. This imposes high economic, health and environmental costs on the region, with a disproportionate impact on women and girls. Despite all the efforts towards increasing access to modern energy services, the uptake of modern fuels and technologies is still limited, with only South Africa having more than 20% access in 2018.

Even improved cookstoves still mostly use traditional fuels of wood and charcoal. Only 1-2% of the estimated $4b per annum needed to achieve SDG 7 on clean cooking is being provided, with a concentration on East Africa. Attracting finance into the sector faces challenges of low-income customers, fractured capital markets, the nascent state of technologies and companies, lack of government incentives and a lack of clarity in the policy environment.

Donor focus on energy access is on electrification, while clean cooking lags behind despite the need for more investments and capacity building. Most of the businesses remain in their early stages which limits scale and investibility. While affordability is a barrier in the sector, people also have established cultural and social preferences for cooking that have to be addressed to encourage uptake of cleaner technologies. One potentially high impact area that is emerging is the provision of LPG under a pay as you use model.

Overall, more needs to be done to improve access to clean cooking technologies and fuels. This has to be a concerted effort of all sector players including governments, donors, funders, and the private sector.