SDG Transition Captain Proposes Solutions Towards Financing The Energy Sector Transition in Ghana - Justica Anima

SDG Transition Captain Proposes Solutions Towards Financing The Energy Sector Transition in Ghana

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SDG Transition Captain Proposes Solutions Towards Financing The Energy Sector Transition in Ghana

The SDG Transition Captain of the Year 2024 in Africa, Mrs. Odelia Ntiamoah, has proposed solutions to the challenges posed by the energy sector transition for local banks. The event which bestowed the honor on her was put together by Think Energy and Deloitte, and emphasizes the need for Energy Transition in Ghana’s energy sector.

In a new report, Mrs Ntiamoah reiterates that in exploring innovative financing models such as green bonds, blended finance, and public-private partnerships, the energy sector can help address the capital constraints faced by local banks. These models, she says, can attract diverse sources of funding and spread risks more effectively.

Renewable sources

According to Mrs Ntiamoah, the energy sector in the country is primarily fueled by oil and gas, with renewable energy sources contributing a relatively small share. The country’s energy policy aims to diversify the energy mix by integrating more renewable sources such as solar, wind, and hydro power. This transition is essential not only for environmental sustainability but also for enhancing energy security and fostering economic growth.

Advocacy

In a recent release, the SDG Captain went ahead to propose a continues advocacy by the media, knowledgeable individuals in the sustainable space, especially energy transition experts, by continuously writing to educate and create awareness.

On her part, she suggests that this is the time to deliberately make sustainability a part of the academic curriculum at a wider and faster rate looking at the need in the sector. According to her, the energy transition in Ghana is a critical endeavor that requires concerted efforts from various stakeholders, including local banks.

Duty of local banks

Despite their crucial role, local banks in Ghana encounter several limitations that hinder their ability to finance the energy transition effectively some of which includes Limited Financial Capacity.

For her, many local banks face constraints in their financial capacity, making it challenging to commit the large sums required for renewable energy projects. The high capital costs associated with these projects often exceed the lending capabilities of local banks, which are further exacerbated by limited liquidity and capitalization.

While these banks face significant challenges in financing renewable energy projects, there are opportunities to overcome these limitations through capacity building, policy advocacy, partnerships, innovative financing models, and risk mitigation strategies.

By addressing these challenges and leveraging their role effectively, local banks can contribute significantly to Ghana’s transition to a sustainable and resilient energy future.

Strategies to Overcome Limitations

As part of her strategies, Madam Odelia proposed that banks need to invest in capacity building and training programs to enhance their expertise in renewable energy financing. This includes understanding the technical aspects of renewable technologies and developing robust risk assessment frameworks.

She also suggests that banks can form partnerships with international financial institutions, development agencies, and private investors or form a pool to leverage additional funding and share risks. Collaborative efforts can enhance their financing capabilities and access to larger capital pools.

About the writer

Odelia Ntiamoah is a media consultant in sustainability (ON Media) and CEO of the Oxford Africa Women Leadership Institute, an international NGO which supports women led businesses with access to finance, market and technical support. Odelia Ntiamoah has been a media leader for 22 years, providing consulting services for the BBC World service and locally corresponding for the Africa News.

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