State or Market-Driven? Renewable Energy Transformation Scenarios in Africa

Renewable Energy (RE) is rapidly gaining relevance as a key technology to quench growing energy demand on the African continent. Many African states are forging and implementing plans to achieve these objectives on a regional, national, and subnational level through policies and legislation, backed by international energy organizations. This pattern coincides with the proliferation of transnational green funds, which expedite and facilitate a rise in foreign direct investment in lucrative new RE markets. As a result, renewable energy is pushed forward due to the internal and external pressures. The design of RE policy instruments, their application and efficiency / scalability vary across African economies, as do the national and global stakeholder networks who are active as change agents in the respective RE transitions. In every case, however, these developments are negotiated through political and financial instruments and thus mediated by either state-driven or market-driven approaches. Up to now we observe different ways of developing the new RE markets in African states, with state-driven approaches in Zambia or Ethiopia vs. market-driven approaches in South Africa or Rwanda. This results in a variety of transformation scenarios, some of which highly appeal to the global architects of a green economy, whereas others find lower attention. In order to understand these approaches, the paper identifies different patterns of renewable energy transition in African economies. The analysis is based on a critical policy analysis of RE policy instruments and green finance flows in Africa. Coming from a critical international political economy perspective the empirical evidence allows identifying state-driven, market-driven or even hybrid modes of RE transitions as well as the driving national and international stakeholders. Overall, the paper sheds light on the variety of patterns of RE transitions.