Clean, low-carbon but corrupt? Examining corruption risks and solutions for the renewable energy sector in Mexico, Malaysia, Kenya and South Africa

Abstract

A decarbonized global energy sector is expected to need cumulative investments in the tens to hundreds of trillions of dollars between now and 2050. Due to its size, the current climate-business environment is therefore prone to corruption risks. Yet such corruption risks are rarely explored within the research community. Much of the extant literature on energy and corruption focuses on fossil fuels, especially oil, coal, and natural gas. However, evidence is emerging that corruption risks also feature in renewable energy markets. This paper asks: Who are the new private actors in selected renewable electricity markets in a sample of countries? How can they be profiled or categorized? To what extent do such actors face corruption risks? How do these actors manage or
fail to manage corruption risks? More broadly, which successful collaboration mechanisms can be identified from the literature about how to reduce corruption? To provide an answer, in this paper the literature on renewable energy and corruption are extensively reviewed, with a focus on three particular sectors: hydroelectric dams, solar photovoltaic panels (in both grid-connected and off-grid configurations), and wind energy (including a mix of offshore and onshore designs). The paper then identifies eight distinct corruption risks evident across categories including nepotism, tender rigging, bribery, and tax evasion. The paper then explores particular corruption risks in four national contexts (Mexico, Malaysia, Kenya, and South Africa) before offering a suite of five recommendations and solutions to help address corruption. These solutions include corruption risk mapping, subsidy registers and sunset clauses, transparency initiatives, anti-corruption laws, and shared-ownership models.

Keywords: Bribery Corruption Transparency Energy governance Wind power Solar energy Hydroelectricity