Investment into Renewable Energy Projects in sub-Saharan Africa: A South African Legal Perspective

Abstract

The South African government is facing a severe energy crisis. This crisis is presented against the backdrop of growing pressures from the international community to mitigate the detrimental effects of climate change caused by the harmful emissions of coal-generated electricity. Renewable energy promises to mitigate South Africa’s energy crisis and prevent further degradation of the earth’s atmosphere. This research, therefore, examines legal factors which affect investment in renewable energy projects in sub-Saharan Africa. It specifically focuses on the South African legal and regulatory framework in sub-Saharan Africa. The research paper identifies fragmented, misaligned and evasive legal and regulatory frameworks as an impediment to investment in renewable energy projects. The paper commences by analysing the plethora of fragmented pieces of legislations, regulations and policy directives presently governing renewable energy in South Africa. It analyses how the current South African legal and regulatory framework thwarts an investor’s decision to expend capital on such projects. The research goes further to comparatively analyse investment into renewable energy projects in Chile as Chile is a fellow ‘Global South’ country which has demonstrated a significant growth spurt in attracting investment into its renewable energy projects. From Chile’s successes, in terms of attracting investment into renewable energy, the research extracts lessons that the South African government can learn therefrom to adopt into its own framework. The research contemplates components which make up such a legal and regulatory framework before examining national challenges that may impede investment into renewables as well as hamper the successful implementation of the said framework. Finally, the research concludes by proposing recommendations to reduce or mitigate legal and regulatory impediments obstructing investment in renewable energy projects in South Africa.