Promoting Private Financing for Sustainable Energy in Africa: The Role of the Africa Energy Guarantee Facility

The AU-EU partnership has evolved over the past few years. In line with the global development agenda, the EU has placed climate change and environmental sustainability at the heart of its development policies. The EU’s policies towards Africa are also rapidly changing to incorporate the green economy as a basis for structural economic transformation in the continent. In this light, this brief assesses the prospects and challenges of the Africa Energy Guarantee Facility (AEGF), a newly launched European Investment Bank risk mitigation instrument for sustainable energy projects in Africa. The brief argues that the facility possesses significant opportunities for economic cooperation and development for both Africa and Europe. It will leverage the EU’s position as the largest investor in Africa and encourage private investment in Africa’s renewable energy sector, while also supporting the development of the continent’s financial sector.