Clean Energy Financing and Sustainable Development: Evidence from the Electricity Market of Ghana

Abstract

This thesis examines four related objectives on clean energy financing and sustainable development: (1) describe the state of clean energy financing and sustainable development; (2) assess the determinants of clean energy financing; (3) estimate an optimal level of integrating clean energy in the electricity market; and (4) synthesize an improved system of clean energy financing. Data was obtained through questionnaire, information request fact sheet, and interviews. The research used descriptive statistics, correlation, linear regression, binary logistics, optimization, and system improvement as the main analytical procedures. The findings revealed evidence of clean energy financing valued at US$ 221 Million. Market factors and enabling infrastructure are significant predictors of clean energy financing. The electricity market has the potential of integrating 1,358.8 MW of clean energy. The electricity generated from clean energy sources influenced the price of electricity negatively. Weak off-taker credit worthiness can be mitigated by a payment mechanism that prioritizes payment of clean energy. For an improved system, this thesis suggests the following: adopting and integrating an enhanced market surveillance system to guide policy and regulatory decisions and reviews; providing technical assistance in structuring bankable projects; undertaking periodic economic and financial analysis of system planning; and prioritising the payment of clean energy.