Abstract
International climate finance is widely heralded as an indispensable catalyst for accelerating the clean energy transition in the Global South, yet its capacity to induce cross-border technological spillovers and crowd in private capital remains insufficiently quantified in Sub-Saharan Africa (SSA). This paper provides an empirical evaluation of the direct and spillover impacts of multilateral and bilateral climate finance commitments on domestic renewable energy investments and technology transfer across 34 Sub-Saharan African economies between 2005 and 2022. Employing a dynamic panel system Generalized Method of Moments (GMM) framework combined with spatial Durbin econometric modeling, we isolate both domestic multiplier effects and spatial cross-border spillovers. The empirical findings reveal that a 10% increase in public international climate finance inflows yields a 3.8% increase in private renewable energy deployment domestically, alongside a statistically significant positive spatial spillover effect of 1.4% on neighboring countries' clean energy investments. Furthermore, we demonstrate that technology transfer—proxied by clean energy capital goods imports and patent adaptations under the Cooperative Patent Classification Y02 scheme—is substantially mediated by recipient countries' institutional absorptive capacity and regulatory stability. Multilateral concessional loans and de-risking guarantees exhibit the highest catalytic coefficients, whereas grant-based finance primarily enhances early-stage project preparation and local capacity building. These findings underscore the imperative of structuring international climate finance architecture to maximize cross-border technological diffusion and leverage private capital through harmonized regional regulatory frameworks.
