Renewable energies in WAEMU countries: the role of financial inclusion

Purpose The sustainable development goals (SDGs), particularly SDG 7, highlight the importance of universal access to reliable, sustainable and affordable energy services. The development of renewable energies has thus become central to improving people’s living conditions, particularly in developing countries. Identifying the factors driving this energy transition is crucial. This study aims to determine whether financial inclusion is an important lever for promoting renewable energy in seven WAEMU countries. Design/methodology/approach This study uses data from seven WAEMU countries over the period 2007–2022. The authors estimate the models using the panel-corrected standard error method to account for heteroskedasticity, autocorrelation and possible serial correlations. The robustness of the results is enhanced by the use of the Driscoll-Kraay method. Findings The results of the estimates show that the financial inclusion indicators (geographical and demographic penetration rates of financial services and strict and extended bancarization rates) have a positive and significant effect on the production and consumption of renewable energies in WAEMU countries. In addition, the estimates indicate that forestry and mineral rents stimulate the production and consumption of renewable energy. These results remain robust to the Driscoll and Kraay tests. Research limitations/implications The conclusions of this study highlight the need for WAEMU governments to strengthen financial and technological infrastructures, notably by developing mobile financial services, to improve access to financial services for the most vulnerable populations, particularly women and young people. Originality/value The originality of this research lies in the fact that it contributes to a better understanding of the relationship between financial inclusion and renewable energy by using four indicators of financial inclusion and two indicators of renewable energy production and consumption. In addition, the use of robust econometric methods ensures the robustness of the results.