Electrifying the ‘eighth continent’: exploring the role of climate finance and its impact on energy justice and equality in Madagascar’s planned energy transition

Tim Cholibois ()

Climatic Change, 2020, vol. 161, issue 2, No 8, 345-364

Abstract: Abstract Developing country case studies have thus far been under-represented in conceptual models attempting to theorize energy transitions. This paper explores the role of climate finance in the process of Madagascar’s planned transition to renewable energy sources as envisioned in the country’s New Energy Policy in order to demonstrate the different experience in developing countries when compared to hegemonic transition narratives. Drawing upon qualitative interviews with energy finance providers and focus groups in recently electrified rural communities, this paper reveals that Madagascar’s transition is dependent on the financial resources mobilized by the government’s technical and financial partners. Climate finance emerges as a critical lever to implement environmental legislation. The interview findings were correlated with census data to evaluate how current financing strategies are directly connected to energy justice issues, namely the equality in access to affordable and clean energy. Through an analysis of projected energy finance flows and key financiers’ financing strategies, this paper exposes a shift from grant-based climate finance to financial instruments with clear return profiles, such as concessional loans and private capital, and finds that the choice of financial instrument impacts the provision of complementary social services in rural electrification schemes. Grants are linked to higher investments into complementary social services, while private financiers focus on innovation and scale. Purely private financed electrification projects were found to negatively impact social cohesion by increasing the inequality in access to energy. This study concludes that if only commercially viable energy projects were to be financed going forward, up to 19 million Madagascans might be excluded from future electrification efforts. Consequently, this paper urges researchers to consider social justice implications when evaluating climate finance strategies.

Keywords: Climate finance; Energy finance; Development finance; Rural electrification; Energy transition; Madagascar (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1007/s10584-019-02644-x

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