Limited funding and high capital costs hinder Africa’s clean energy expansion. Dr. Eyitemi Fasanu explores solutions to bridge the investment gap.
In this first edition of our Expert Opinions series, we’re excited to feature Dr. Eyitemi Fasanu, an economist and researcher specializing in energy economics. With expertise in renewable energy policy and macroeconomic trends, Dr. Fasanu has extensively analyzed Africa’s energy sector, highlighting key investment gaps and opportunities for growth.
In this conversation, she shares her insights on Africa’s clean energy underinvestment, the structural challenges slowing progress, and how innovative financing models could help accelerate change.
Why Energy Economics?
Dr. Fasanu, thank you for joining us. Africa has some of the most untapped renewable energy resources globally. Yet despite hosting 20% of the world’s population, it only attracts 2% of global clean energy spending. As someone deeply invested in this field, what drives your passion for addressing this disparity?
Dr. Fasanu: Thank you so much for having me, Susinsight. It truly is a pleasure. I’ll get right into it. Over 54% of Africa’s population experiences multidimensional poverty. In Sub-Saharan Africa, one of the continent’s five subregions, that number rises to 86%—the highest in the world. In Nigeria, where I’m from, 63% of people are affected.
Those numbers are staggering—86% in Sub-Saharan Africa and 63% in Nigeria. Before we go further, could you clarify what multidimensional poverty means for those who may not be familiar with the term?
Dr. Fasanu: Absolutely. Multidimensional poverty looks beyond income. It measures deprivation across key areas like education, healthcare, living conditions, and access to essential services. Someone might earn above the poverty line but still lack electricity, clean water, or proper healthcare. That’s why a broader approach is needed to understand and address poverty.
That makes sense. It’s not just about income but also about quality of life and access to basic needs. You’ve linked this directly to clean energy—why is access to affordable, reliable power so fundamental?
Dr. Fasanu: Clean and affordable energy isn’t just a luxury; it’s essential. Without it, education, healthcare, and businesses all struggle. A school without electricity means students can’t study after dark. A hospital without power can’t store vaccines properly. Businesses can’t grow if they can’t keep the lights on. Beyond that, clean energy reduces reliance on polluting fuels, improving both health and the environment. It’s a cornerstone for progress.
And yet, Africa has some of the richest renewable energy resources, especially solar. That contrast between potential and reality is striking.
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Dr. Fasanu: Exactly. Africa holds 60% of the world’s best solar resources and has vast reserves of renewable and non-renewable energy. Yet, it remains the most energy-deficient continent. That’s why I’m passionate about this work—Africa has everything it needs to thrive.
That ties into something you’ve said before: that Africa has an “authority voice” the world isn’t ready for. How does energy fit into that vision?
Dr. Fasanu: I strongly believe Africa has an authority voice that has yet to be fully recognized. Energy plays a key role in shaping that influence. If you look at global geopolitics, energy is one of the most powerful tools. The ability to produce, control, and trade energy impacts economic strength, political leverage, and global partnerships. Energy independence and leadership are essential for Africa to take its rightful place on the world stage.
“Clean and affordable energy isn’t just a luxury; it’s essential. Without it, education, healthcare, and businesses all struggle.”
Your journey in energy economics has been remarkable, from your academic achievements to your work on renewable energy and macroeconomic modeling. What inspired you to specialize in this field, and how has your focus evolved?
Dr. Fasanu: It started with my parents. My siblings and I grew up in a home where our parents encouraged exploration. They never imposed their ideas on us but paid attention to what we were naturally drawn to. They helped us strengthen our weak areas while supporting our interests.
That’s a great environment to grow up in. So when did you start thinking seriously about energy economics?
Dr. Fasanu: It happened in my first year of senior secondary school—what we call SS1 in Nigeria. I started wondering what I truly wanted to be known for. One day, I sat at our home desktop computer and typed into a search engine: “What can I study in the university that combines Mathematics, Agricultural Science, Economics, and Geography?”
These were my favorite subjects, so I figured my future career should involve all of them. The search results listed a few options, but the one that stood out was Energy Economics.
That’s such a unique way to discover a career path—by finding the perfect mix of subjects you love. What happened next?
Dr. Fasanu: I spent hours that day reading about it. When I told my parents, they fully supported the idea. But when it was time to apply for university, we realized no school in Nigeria offered the course at the time. My parents had a strict “no schooling abroad for a first degree” rule, so I went for a BSc in Economics at Covenant University.
Even while studying Economics, I kept exploring Energy Economics through self-study. By the time I finished my degree, the University of Ibadan had introduced Energy Economics as a course. So I went straight into my MSc, followed by a PhD in the same field.
And over time, your focus within Energy Economics became even more specialized?
Dr. Fasanu: Yes. Over the years, I’ve fine-tuned my focus toward Economic Geography, a branch of Energy Economics. I’ve been especially inspired by the works of Paul Krugman and Indra Overland, among others. This specialization has come from years of study, watching global trends, and reflecting on how my interests align with Africa’s potential.
Energy economics in Africa is complex, with infrastructure gaps, policy issues, and financial limitations. Could you share a major challenge you’ve faced in your work and how you addressed it?
Dr. Fasanu: The biggest challenge is data—or rather, the lack of it. Africa has a huge data gap, which makes it difficult to track trends over time. If we don’t have reliable numbers, it’s hard to make informed decisions about energy planning and investment.
That must make research incredibly difficult. What specific obstacles do you face when trying to collect data?
Dr. Fasanu: A lot. Getting household-level data across regions is tough due to logistics, costs, and accessibility. In some areas, political instability makes data collection risky. Standardized data collection methods aren’t always in place, and sometimes people are skeptical about sharing information.
With all those barriers, how do you work around the data issue?
Dr. Fasanu: My mentors taught me that while data gaps are real, they’re not an excuse. We use economic modeling tools like Computable General Equilibrium (CGE) Analysis to estimate what’s missing. In simple terms, we use what we do know to make informed projections about what we don’t know. It’s not perfect, but it’s better than doing nothing. Or, as we say in Nigeria: we move!
“My mentors taught me that while data gaps are real, they’re not an excuse. We use what we do know to make informed projections about what we don’t know. It’s not perfect, but it’s better than doing nothing.”
Where Funding Falls Short
Let’s talk about Africa’s position in the global clean energy economy. Why has the continent struggled to attract significant investment in clean energy, and what do you see as the biggest barriers?
Dr. Fasanu: Despite Africa’s vast energy resources and urgent power needs, it receives less than 2% of global clean energy investment, even though it makes up 20% of the world’s population. This gap has widened due to overlapping crises, including the COVID-19 pandemic, global energy and food shortages caused by conflicts, and increasing climate risks.
That’s a big imbalance. How have these crises affected funding for clean energy projects?
Dr. Fasanu: They’ve driven up borrowing costs and reduced public funding. In many countries, the cost of repaying debt is now higher than what is being invested in clean energy. To achieve universal electricity access and meet climate goals by 2030, Africa’s energy investment must double to $100 billion per year, with two-thirds going to clean energy projects. Right now, investment is stagnant, and fossil fuel spending is also declining, creating a funding shortfall.
What financial hurdles make clean energy projects harder to fund?
Dr. Fasanu: The high cost of capital—due to both real and perceived risks—is a major challenge. Private investors are hesitant because of weak regulations, unreliable contracts, and concerns over payments from state-owned utilities. In fragile states, political instability and reputational risks add another layer of uncertainty. As a result, development banks like the World Bank and the IMF are the main funders of clean energy in Africa.
How does the cost of capital compare to other regions?
Dr. Fasanu: It’s two to three times higher for large clean energy projects in Africa than in developed countries. For smaller projects, which rely on local banks, the cost is even steeper. This makes projects less viable, raises electricity prices, and forces many to stick with cheaper but more polluting energy sources.
Beyond financing, how do these challenges affect energy access, especially in rural areas?
Dr. Fasanu: Reaching universal energy access by 2030 will require $25 billion per year for small-scale projects, particularly in rural communities where affordability is a key issue. Right now, over 30% of Africa’s population lacks electricity, and 70% rely on polluting cooking fuels, leading to millions of premature deaths from indoor air pollution.
What role does concessional financing play in solving these issues?
Dr. Fasanu: It’s critical. Concessional financing helps fund energy access programs for low-income households and supports early-stage funding for local clean energy businesses. Nigeria’s mini-grid program and Rwanda’s support for women-led off-grid enterprises are good examples of how this funding can drive progress.
What other financing models could help?
Dr. Fasanu: Equity funds, off-balance-sheet financing, and long-term affordable loans from commercial banks are all key. Africa’s clean energy transition needs a mix of financing tools suited to different types of projects.
How can we make large-scale renewable energy projects more financially viable?
Dr. Fasanu: Many of these projects—expected to provide 80% of new power in Africa’s clean energy transition—depend on concessional funding and credit guarantees to attract private investors. Innovative financing solutions, like currency hedging and liquidity support mechanisms, have been effective in drawing more private capital into the sector.
What about grid development? How does that fit into Africa’s clean energy future?
Dr. Fasanu: A reliable electricity grid is essential, but financial struggles at state-owned utilities and high transmission losses slow progress. Expanding and modernizing the grid will require $50 billion per year by 2030, along with new financing models that don’t rely solely on government budgets.
Energy efficiency is often overlooked in these conversations. What level of investment is needed there?
Dr. Fasanu: Investment in energy efficiency needs to increase sevenfold by 2030. Small-scale projects face unique challenges, including low awareness and limited concessional funding. Public capital, consumer finance programs, and green bonds can help bridge this gap.
Africa has major opportunities in critical minerals and low-emission hydrogen. What needs to be done to fully unlock this potential?
Dr. Fasanu: Stronger regulations and enforcement of environmental, social, and governance (ESG) standards are key. While many countries have policies on paper, implementation remains weak. Each country must focus on meeting its climate commitments, and concentrated efforts in different regions can add up to the large-scale progress Africa needs.
Next Power Moves
As someone closely following energy trends, what emerging changes do you think will have the biggest impact on clean energy adoption in Africa? And how does your work fit into this?
Dr. Fasanu: Some exciting shifts are happening, and I believe they will have a major impact on clean energy adoption in Africa from 2025 onward.
One of the biggest changes is the falling cost of renewable energy, especially solar and wind. Projects like Egypt’s Benban Solar Park and South Africa’s REIPPP program show how quickly prices are dropping, making large-scale renewable projects more affordable. That’s a game changer because it means clean energy can compete with, or even outprice, traditional power sources.
That’s a big shift. Beyond affordability, what else is driving clean energy growth?
Dr. Fasanu: Decentralized energy systems are another key factor. Mini-grids and off-grid solar solutions are gaining traction. Nigeria’s Rural Electrification Agency has made impressive progress with mini-grids, and East Africa has seen rapid adoption of pay-as-you-go solar models from companies d.light, which operates across Africa providing clean energy access to households and small businesses. These solutions are especially useful in rural areas, where extending the main grid isn’t practical.
That makes sense—decentralized systems mean communities don’t have to wait for large infrastructure projects to get power. Are there any technological breakthroughs making a difference?
Dr. Fasanu: Yes, digitalization is playing a huge role. Smart grids, IoT devices, and even blockchain are changing the way energy is managed. Kenya Power, for instance, is implementing smart grid projects, and Sun Exchange is using blockchain to fund solar projects. These innovations help distribute electricity more efficiently, cut losses, and improve reliability.
Beyond technology, what about policy? Are governments stepping up to support this transition?
Dr. Fasanu: Absolutely. Good policies and regulations are essential. Morocco’s ambitious renewable energy goals and Nigeria’s green bond initiative show how government action can attract investment and encourage growth in the sector. Without the right policies, progress would be much slower.
Funding is a big part of this transition. Are you seeing a shift in how clean energy projects are financed?
Dr. Fasanu: Yes, and it’s promising. The African Development Bank’s Desert to Power initiative and the U.S. government’s Power Africa program are bringing in significant funding. These investments help scale clean energy solutions, making them accessible to more people while aligning with long-term economic growth.
That’s encouraging. But beyond large projects and investments, how does clean energy adoption benefit local communities?
Dr. Fasanu: Local involvement is key. Ethiopia’s Scaling Solar Program and Rwanda’s efforts to manufacture solar panels locally show how these projects can create jobs and strengthen local economies. When communities play an active role—whether through jobs, training, or small businesses—the shift to clean energy becomes much more sustainable.
And your work—how does it fit into these developments?
Dr. Fasanu: As an energy economist, my work focuses on analyzing how the energy transition affects economies. I provide insights that guide policy, investment, and business decisions. A big part of my work is helping stakeholders balance economic growth with environmental goals so they can make informed choices. Through research, collaboration, and knowledge sharing, I contribute to building a cleaner, more resilient energy sector in Africa.
Shifting gears a bit—if you weren’t working in energy economics, what other career would you have pursued?
Dr. Fasanu: Oh wow! Honestly? I’d probably be a full-time African cuisine chef. Cooking is one of my biggest passions, and I love celebrating our local dishes, snacks, and drinks. Who knows? Maybe I’ll start a food business one day!
That’s amazing! And for our readers who care about sustainability, what’s one thing they can do to make a real impact?
Dr. Fasanu: My biggest advice? Don’t get overwhelmed by too much information. Sustainability is a broad field, and it’s easy to feel lost. Instead, pick one area that interests you and focus on that.
Learn passively—talk to experts, listen to podcasts, and attend conferences. You’ll absorb knowledge without feeling pressured. And most importantly, share what you learn! Start a podcast, write a blog, post on LinkedIn, create a course—whatever feels right for you. You don’t need to be an expert to contribute. Just put your insights out there, and over time, you’ll see the impact you can make.
“Sustainability is a broad field, and it’s easy to feel lost. Instead, pick one area that interests you and focus on that.”
Thank you for sharing your insights, Dr. Fasanu. Your work is truly inspiring. For those who want to follow your work or support the initiatives you’re passionate about, how can they connect with you?
Dr. Fasanu: It’s been a pleasure—thank you, Susinsight, for having me!
There are a few projects I’m actively involved in. One is Research Ready Hub, which I co-founded. Our goal is to strengthen Africa’s research capacity and raise awareness about the value of high-quality research. We offer training, consulting, and educational resources for individuals and organizations.
I’m also an Economic Analyst at Kainosedge Consulting, where we provide macroeconomic insights to help businesses and policymakers make strategic decisions.
Beyond that, I teach and publish on energy economics, focusing on economic geography. I’m passionate about making energy policy and investment decisions easier to understand. Every week, I host discussions on these topics, and I’m currently developing courses for those who want to dive deeper. For anyone who wants to connect, you can reach me on LinkedIn (Eyitemi Fasanu, PhD) or by email at ey*******@gm***.com. Thanks again for having me!
Your dedication to research and economic development is creating a real impact. This conversation highlights the urgent need to close Africa’s clean energy investment gap and explore practical solutions for lasting progress. Collaboration, innovation, and informed decision-making can drive meaningful change.
Thank you, Dr. Fasanu, for sharing your insights and the important work you do in energy economics and policy.
