Global companies are increasingly under pressure to be energy efficient and control pollution resulting from energy use. Environmental conservation through sustainable energy exploration is a priority of most environmentalists and environment protection agencies worldwide. Countries endowed with energy sources such as oil, gas, hydro power and geothermal have faced challenges of exploration and efficient utilization of such energy sources due to lack of funding. While some countries, such as the United States of America, the United Kingdom, and Germany, have developed models such as on-bill funding, other countries rely on private companies and organizations to finance public energy. Some of the countries with the highest private investment in public energy are highlighted below.
South Africa has invested heavily in renewable energy such as wind power because of the country’s potential to generate power. Up to 70% of the energy sector has been funded by the private sector because of the participatory policy making process that includes all players in the energy sector. South Africa has also aligned its energy policy with the climate and development policies which allow organizations that fund energy sector to also support climate-related projects. A total of $3.97 billion has been invested by the private sector in public energy. Schneider Electric, Commonwealth Development Corporation, and European Investment Bank have funded the Energy Access Venture for approximately $54 million. International Finance Corporation financed renewable energy especially in low income earning regions of South Africa.
Chile is one of the countries with the highest foreign direct investments and the best emerging economy in Latin America. Most of these foreign direct investments were directed towards infrastructural development and renewable energy in 2015, according to the World Bank reports. Chile is considered a safe place to invest because of its competitiveness, transparency, strong institutional framework, and favorable policies. The high demand for energy, especially in coal and hydroelectric power, has necessitated the need for more investment in the energy sector. In 2015 the private sector contributed over $2 billion towards public energy. Some of the private companies that have invested in public energy in Chile include BHP, Anglo American Plc, AES, and Energia Renovables Fotones de Chile Ltd.
For a long time, Morocco has imported over 95% of its energy in the form of fossil fuel. The growing population and the ever rising standards of living have significantly increased demand for energy. The government of Morocco has embarked on increasing efficient energy supply in the whole country. Through the public-private partnership, the country has been able to explore some of its natural resources such as the wind, solar, and hydro. Four of Morocco’s six solar projects are privately funded with the country recording a total of $1.8 billion funding through private partnership. The shared risks between the government and the private sector change of energy policies and advisory services have encouraged more investors in public energy. Some of the FDI include Energy Development Funds, Energy Investment Company, and Hassan II Fund.
More Abundant, More Efficient Energy
The presence of open policies, transparency, and a country’s potential to generate efficient energy are some of the leading factors to increased funding in public energy by private institutions. The funding has increased energy accessibility by the majority of citizens in these countries. Other countries that have benefited from private investment in public energy are Mexico, Philippines, Brazil, Pakistan, Turkey, Peru, and Honduras.
Highest Private Investment In Public Energy By Country
|Rank||Country||Private Investment In Public Energy Infrastructure, 2015|
About the Author
Benjamin Elisha Sawe holds a Bachelor of Arts in Economics and Statistics and an MBA in Strategic Management. He is a frequent World Atlas contributor.
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