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Anti-corruption in the renewable energy sector

The renewable energy sector is a rapidly growing market that is crucial to increasing access to energy and supporting climate change mitigation. Like the extractives sector, the renewables industry requires substantial capital investments, which can come with substantial risks of corruption. Similarly, government subsidies and the issuance of renewable energy certificates attract rent-seeking behaviour. A number of examples illustrate that corruption in green energy markets is a transnational problem. Investors and renewable energy firms based in the Global North may become involved in corrupt practices in renewable energy projects in developing countries. Ultimately, the literature indicates that the manner in which corruption manifests itself in the energy sector in developing countries is as much a function of local political economies as it is about the idiosyncrasies of the green energy sector or the way in which investments are structured.

15 October 2020
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Main points

  • The development of renewable energy markets poses a set of unique corruption challenges, especially in the African context. Experiences from the extractives sector have led some in the industry to warn of a potential “green curse”.
  • Stakeholders in renewable energy value chains include not only manufacturers, suppliers and users but also government agencies, financial institutions and private technology companies, as well as informal local networks.
  • Potential forms of corruption include bribery, theft, collusion and bid-rigging.
  • Anti-corruption strategies designed for the sector should be cognisant that local contextual realities are as important as the industry-specific idiosyncrasies of the green energy sector.

Cite this publication


Rahman, K.; (2020) Anti-corruption in the renewable energy sector. Bergen: U4 Anti-Corruption Resource Centre, Chr. Michelsen Institute (U4 Helpdesk Answer 2020:21)

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About the author

Kaunain received her Master's in Corruption and Governance from The Centre for the Study of Corruption at the University of Sussex in the UK where her focus area of research was corruption in international business. She works as Research Coordinator at Transparency International (TI), and her main responsibilities lie with the Anti-Corruption Helpdesk.

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All views in this text are the author(s)’, and may differ from the U4 partner agencies’ policies.

This work is licenced under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International licence (CC BY-NC-ND 4.0)

Keywords


energy sector