Dynamic Role of Renewable Eenrgy to Strengthen Energy Security and Energy Poverty Reduction: Mediating Role of Low Carbon Finance


 This paper provides an empirical analysis of deploying renewables in Africa's five most populous countries for 2001-2019. It analyzed these factors to see how they impact deploying renewables by employing panel data using the pooled ordinary least squared(OLS) at frim level analysis to increase energy security and to reduce energy poverty. After the analysis, we proved that access to clean fuels and technologies for cooking needs the study countries to deploy renewables as most Africans cook with polluting fuels having detrimental health implications. The analyses further revealed that these countries generate a chunk of their electricity from fossil fuel sources, making it imperative to jettison fossil fuels and embrace renewables cheaper and environmentally friendly. The analysis also showed that the Quality of regulation in a country is vitally important to scaling up renewables in the study countries since the right policy tools underpin the transition. Furthermore, the lack of Electrification is important to developing renewal energy sources in the study countries. Sub-Saharan Africa has about nearly 600 million people not having access to electricity. Thus deploying renewables will bridge the access gap. Cleaner energies will be the panacea to the study countries’ energy insecurity situation and bridge the access gap. The study countries have the technical and theoretical potential for all the renewable energies needed to ensure sustainable consumption. What is needed is to institute cornerstone financial policy de-risking instruments to crowd in private capital since the renewables sector is perceived as a high-risk area.

pooled ordinary least squared clustered method(OLS) was used in analysing the data from a panel   Table 1 shows the macroeconomic indicators of the study countries. The Gini coefficient explains 127 the income distribution of a population. How uneven income in a population is distributed.
Economic growth continues to be robust among these countries, which make up the chunk of the 129 population in the African countries. The Democratic Republic of Congo has the second-highest 130 population growth rate among the study countries and certainly one of the highest on the continent. 131 The country has more than 84 million people, with a 72 872 billion gross domestic product and a 132 per capita income of $ 867.The average real GDP growth rate is 5.9 percent from 2010-2020, on 133 a steady growth path. However, the pandemic has likely distorted this steady growth pathway. The 134 country's real GDP growth was projected to grow by 3.9% downward in 2020 and 3.4% in 135 2021(AfDB, 2020). But for the pandemic, these projections would be revised downwards since 136 the demand has slowed from China for its mineral resources. Copper and cobalt have all seen a 137 significant drop in prices. DRC's economy relies heavily on these raw materials. The extractive 138 sector forms the nucleus of the economy of the country. 139 The GDP growth is expected to be reduced by 6.2 and 8.1 points, giving rise to a budget and 140 current account widening deficit coupled with inflation doubling against what was initially 141 projected(AfDB, 2020). The real GDP growth rate is forecasted to contract by 2.3% in 2020, as 142 the pandemic continues to the first half of 2020 and will worsen by 4.2% by the worst-case scenario 143 if the pandemic continues to December(AfDB, 2020). The country's economy lacks diversity and 144 relies mostly on the primary sector, dominated by mining. The Gini coefficient for DRC is 42.1%, 145 which is very high for the country. This explains the uneven distribution of income in the country. 146 The wealth in the country is not equally distributed among the population. That is almost half of 147 the people of varying income distribution in the country. The higher the Gini coefficient, the 148 inconsistent the income distribution. 149 Ethiopia is one of the countries in East Africa with the fastest economic growth rate. Ethiopia has 150 the highest population growth rate of 8.2% of about 108 million people, with GDP per capita of 151 half of more than a thousand dollars, $550. Ethiopia has a GDP of 220 billion dollars. Ethiopia's 152 average real GDP growth rate since 2010 is 9.7 percent; this is quite a robust growth pathway the 153 country is heading. Ethiopia even projects to grow its GDP by 11% over the 154 decade (Selvakkumaran & Silveira, 2018). The country relies mostly on agricultural products; it 155 gives the country about 65% of its foreign exchange, and tourism makes up 9% of its GDP(AfDB, 156 2020). The country's real GDP rate is forecasted to decline from before the COVID-19 figure of 157 7.2% to 3.6% Covid-19 level, and the worst-case scenario of 2.6% to December(AfDB, 2020). 158 The country has a Gini Coefficient ratio of 39.1%, indicating the country has uneven income 159 distribution of about 40%. The wealth of the country is skewedly distributed. 160 Egypt is a more developed country relative to other countries in the study. It has a population 161 of almost 100 million people, growing at 1.9 % with a GDP of more than $1 billion people as of  forecasted to fall by 90% in 2020 due to lower oil demand coupled with increased spending 199 increasing the budget deficit to about 6.7% and 7.8% in a worst-case scenario(AfDB, 2020). All 200 this will increase the current account deficit to 5% in the country's worst-case scenarios, provided 201 the pandemic goes beyond 2020. (AfDB, 2020) (Hepburn et al., 2020) 202 In the light of these economic woes, the country has come out with a stimulus package to lessen 203 the pandemic's burden. It has set up a naira 500 billion credit facilities ($1.4billion) to aid the 204 health sector, give tax relief to the populace, and encourage companies to continue to employ even 205 amid the pandemic. (AfDB, 2020). The government has increased the number of conditional cash 206 transfers to the households to 3.6 million and reduced the interest rate from 9% to 5%(AfDB, 207 2020). All these aimed at cushioning the impact of the pandemic.

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South Africa is Sub Saharan Africa's second-largest economy, with a population growth of 209 1.2% and nearly 60 million people. Its GDP per capita is $7,525 and GDP of789billion dollars.

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South Africa's average annual GDP growth since 2010 is 1.9%, showing the country has been on 211 a slower growth pathway. Its Gini coefficient is the highest among the countries in the study. This 212 shows the stark reality of the uneven distribution of wealth in South Africa. Despite its GDP per 213 capita, the income distribution is highly irregular. This does not promote social inclusion.

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Furthermore, table,1 shows that South Africa's economic performance has been very sluggish 215 due to inefficient structural reforms in the energy sector and labor rigidity. This has had dire 216 consequences on the economy. The economy has been growing on average of 1.1 % for the last 217 five years(AfDB, 2020). The country is faced with hydra-headed problems of a high 218 unemployment rate of 30% coupled with economic contraction in the second half of 2019 as well 219 as the COVID-19 and its resultant effects, electricity supply bottlenecks, and financially distressed 220 state-owned companies, making the growth in 2020 almost nonexistent (AfDB, 2020). The 221 economy grew by 0.2% in 2019, the least in a decade; the GDP will contract 6.3%in 2020 and 222 7.5% in the worst-case scenario. According to the South African revenue service, the country's 223 fiscal situation has been made worse by the loss of ZAR285 billion or $15billion, exacerbated by 224 the pandemic(AfDB, 2020), (   Ethiopia is another country that is less electrified among the study countries. Its urban electricity 250 access rate is nearly 100%, while the rural access rate is 32%. The share of renewable energy in  Similarly, about 95% of Ethiopian households cook using polluting fuels and technologies, 259 especially firewood, and the number is almost a hundred in the countryside (Beyene et al., 2018).

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The situation is even worse for rural areas since they are less electrified, but the problem is better 261 in urban centers, with a high value of 38% biomass and 30% firewood (Beyene et al., 2018). Urban  Egypt is the only country that has achieved a 100% electrification rate among the study countries.  The country has universal access for urban and rural areas and has gained 97.6% access to clean 273 fuels and cooking technologies. On the other hand, the renewable energy consumption of total 274 final consumption is 5.7%, which is relatively less low. in Egypt (Hamed & El Mahgary, 2004). The issue of pollution is a primary concern for Egypt due 281 to Egypt's importation of oil and gas to meet rising domestic consumption. As a result, the 282 government has adopted measures to meet this increasing demand, neglecting energy efficiency  Nigeria has about 56.5% access to electricity of almost 200 million people. According to (Aliyu 291 et al., 2018), Nigeria aims at a 75% electrification rate in 2020 but still lags in achieving the target.

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Urban Access to electricity is 81.9%, and rural access is woefully 30.9%. Also, renewable energy 293 consumption in final energy consumption is 86.6%, and access to clean fuels and cooking 294 technologies is 4.9%.In Nigeria, 91% is the total energy consumption in the housed hold, mostly 295 done using wood fuels, causing an estimated 129 million Nigerian vulnerable to diseases and   Finally, South Africa is the most electrified country in Sub Saharan Africa, with 91.2% of the 308 population hooked to the grid. Urban Access to electricity is 92.0%, and rural access to electricity 309 is 84.6%. The percentage of renewables in final energy consumption is 17.1%, and access to clean 310 fuels and technologies for cooking is 84.75%, the second-highest after Egypt in the study countries.   The figure 1 and figure 2 shows that Ethiopia has more cleaner technologies, comprising five 324 cleaner technologies. South Africa and Egypt followed her. Nigeria has lesser renewable energy 325 generation, and DRC consumes nearly 100% hydropower, table,3.

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The electricity supply situation in Africa, particularly SSA, is one of starvation. The study 330 countries except Egypt from North Africa has 100% electrification, and South Africa above 80%.

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The rest are less than 80%making the populace live substandard lives. SSA power sector is             It came out not significant in the analysis. Another variable that met anticipation before the analysis 741 is _EFOS, which is electricity generated from fossil fuel sources. A country that generates a bulk 742 of its electricity from fossil fuel sources should strive to switch and generate more renewables.

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This will make the country dependent on local resources and not be exposed to geopolitical risks 744 in the energy market. Indeed a variable that equally satisfied our curiosity during the analysis is 745 the electrification rate. It came out perfectly significant. As some of the study countries don't have 746 universal access, it is expected that they will embrace and scale up renewables to achieve this  The variables that are interacted are REGULTY, EFOS, and CLEANT_FC. The results proved the 768 same significance levels as in the pooled OLS in the first equation. Effective compliance was not 769 significant, as in the first equation. These shows the results are robust. It must be noted that the 770 interaction term is significant. This implies that the interaction of regulation quality, Electricity generation from fossil fuel sources, and access to clean fuels and cooking technologies impacts the 772 scaling up of renewables in Africa positively. More so, the direction of the relationship is a direct 773 relationship. The correlation, therefore, implies that when renewables capacity increases, the 774 interaction term increases. In essence, when any of the study countries generate more electricity 775 from fossil fuels, has a good regulatory environment as well as the need for increased access to 776 clean cooking fuels and technologies, it is very imperative for the country to increase the 777 deployment of renewables.

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The test indicates that the variable is stationary at 5%. From the analysis in table 9. all most of the 800 varibales are nonstationary, using the Bai and Ng (2001,2004) to test cross sectional he augments  Table 9 are nonstationary and 807 only became stationary after their I(1). However, with the Peasaran test in the second generation, 808 the varibles assume statioanrity without taking their I(1).  Electricity from fossil fuels sources has the higest Boxplot maximum value of nearly 100, followed 817 by electricifaction in the study countries. Africa generates about 81% of its electricity from fossil fuels sources . CO2 has the least Boxplot value of less than 1.That explains 819 the negiglible levels of CO2 emission among gthr study countris, other than south Africa and Egypt. Electrification has the highest mean score, suggesting that most countries are fully electrified.

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EFOS has the second highest mean value, implying the countries generate a lot of their electricity 827 from fossil fuel sources. Another striking mean value is ENEIMPRT, which is negative, showing 828 that the countries are energy exporters.CO2 has the least mean value, which is anticipated as the