Mitigation-related development finance, governance and green energy consumption in Africa

Though climate agreements emphasize the transfer of external climate finance to developing countries to boost renewable energy deployment, the place of governance in this process has been neglected. This study investigates the effect of mitigation-related development finance on green energy consumption in Africa, considering the role of governance. Data was collected for 27 African countries with regular mitigation-related finance inflows from 2003 to 2022 and analyzed using the Feasible Generalized Least Squares and Panel Corrected Standard Errors methods. Mitigation-related finance, political stability, voice and accountability and political governance significantly increase green energy consumption while government effectiveness and institutional governance negate it. The effectiveness of mitigation-related finance on green energy consumption in Africa is contingent on governance quality. Good governance magnifies the benefits of mitigation-related finance while poor governance erodes them. Donor countries should ensure the continuous and regular inflow of mitigation finance while recipient countries enforce their institutional frameworks.