Institutional quality and investment in renewable electricity in Sub-Saharan Africa

Author(s):

Joseph Wilson¹, Daniel Kwabena Twerefou^1*, William Bekoe¹, Wisdom Akpalu²

twerefou@yahoo.co.uk
2024-07-31 06:57:59

38 Downloads 62 Views

Abstract

Even though investment in renewable electricity could potentially enhance access to elec tricity in Sub-Saharan Africa while contributing to the global fight against climate change, key drivers of renewable energy investment such as institutional quality have not been examined. This study investigates whether the quality of institutions matters in explaining investments in renewable electricity in Sub-Saharan Africa using panel data for the period 2000 to 2015 and the system generalized method of moment estimation technique. The results indicate that both economic and political institutional quality matter in renewable electricity investment in Sub-Saharan Africa. A unit increase in the quality of economic and political institutions leads to a 6% and 65% increase in installed capacity for renewable electricity respectively. Policy choices should focus on strengthening existing laws that will ensure improvement in property rights, financial freedom, fiscal freedom, civil liberties, political rights and labour legislation to induce investment in renewable electricity.

Keywords
Renewable Electricity, Economic Institutional Quality, Political Institutional Quality and Installed Capacity

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