Energy Infrastructure Investments and the Built Environment: Financial Framework Conditions in Selected Countries

This paper examines the financing structures and environments for energy infrastructure in four selected Sub- Saharan African countries: Cote d'Ivoire, Ghana, Zambia, and Kenya. These nations and the entire continent are poised for significant population growth in the coming years, driving increased energy demand. This is particularly critical for the real estate sector, which has been set to expand dramatically. Therefore, besides the volume of new real estate developments, it is of central qualitative concern whether sufficiently robust energy infrastructure will be in place to support them adequately when realised. Key findings highlight that, while political and economic conditions are often conducive, the primary barriers to investment, especially private investment, often stem from higher perceived risks than other assets or global regions. These risks vary widely across political, financial, and technical clusters but frequently manifest institutionally or through regulatory challenges. The four case studies reveal several recurring barriers: noncommercial tariff structures influenced by high generation costs and subsequent subsidy dependencies, monopolistic market structures leading to transmission and distribution inefficiencies, and difficulties securing capital investment due to insurance challenges. Consequently, addressing the specified risks requires a suitable combination of policy measures comprising adequate governance measures that foster institutional, regulatory, and macroeconomic stability. Understanding these dynamics is crucial for policymakers and stakeholders seeking to attract and sustain energy infrastructure investments across these regions. By addressing these barriers, policymakers can mitigate risks, encourage private sector participation, and foster sustainable development aligned with expanding energy demands driven by demographic and economic growth.