Green finance and energy security in Africa: A panel VAR approach to sustainable development

Africa's energy security remains fragile amid unreliable supply, high import exposure, and climate shocks, even as the continent pursues a low carbon transition. This study examines how climate-oriented finance and renewable energy deployment relate to energy security in 16 African countries from 2000 to 2021 using a Panel Vector Autoregression framework. To ensure conceptual clarity, external financial inflows, foreign direct investment and mitigation related development finance, are distinguished from renewable energy consumption as an energy system outcome. Energy security is measured using energy import dependence, energy intensity, and energy productivity. Results show that shocks to renewable energy consumption are followed by medium run improvements in energy intensity and productivity, alongside volatile short run dynamics. In contrast, foreign direct investment exhibits weak average effects in pooled models, becoming more evident when conditioning on institutional quality and income groups. Robustness checks using alternative finance proxies and stratified models confirm the main patterns. The findings are interpreted as time ordered dynamic relationships rather than structural causal effects. • Reframed abstract and introduction to foreground Africa’s energy security and financing constraints, linking strategy. • Expanded and structured contributions across theory, empirics, and policy, distinguishing finance flows and renewables. • Strengthened theory and empirics by integrating development and energy theories, synthesizing African literature, and justifying. • Improved transparency by motivating Panel VAR, comparing alternatives, and interpreting dynamics against theory and evidence.