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AEW 2023: Africa Energy Development Marred by Decarbonization Demands

As many African nations address energy poverty, strive to meet growing energy demand, and work toward just energy transitions for Net Zero commitments, the question of aligning with global decarbonization efforts before substantial carbonization emerged in Africa was raised during a session at African Energy Week in Cape Town from October 16-19.

Led by Reed Blakemore, Director Research and Programs at US thinktank Atlantic Council, the issues of financing these transitions to greener energy, policy design, public-private partnerships and community development were also raised.

Speaking during the session, Emilie Bel, a nonresident fellow with the Atlantic Council’s Africa Center noted that the conversations to accelerate key partnerships in energy development were now more critical than ever. “Energy demand is expected to skyrocket … inflation is rising.”

Bel admitted that many challenges remained, including access to finance, lack of infrastructure capacity building, lack of energy storage and the establishment of trade partnerships yet to take place; however, she highlighted that although the infrastructure gap was significant, public institutes and the private sector had the ideal opportunity to invest in green infrastructure and technology.

Bel further noted that some strides have already been made in rolling out greener energy infrastructure, citing projects such as the Lake Turkana wind farm in Kenya, which can power one-million homes and the Ouarzazate solar power station in Morocco, but noted that much more needed to be done. “Africa currently has only 1% installed capacity in terms of solar photovoltaic roll-outs,” she said.

“Given the size of this [infrastructure] gap, mobilizing all sources of funding are now essential. Institutional financing represents 37% of total investment commitments, but this gap is too large to be bridged by public funding alone. African countries need to explore multiple funding sources and the private sector now has a key role to play in financing the continuation of these infrastructure roll-outs,” says Bel, adding that this includes the United Sates, European Union and OECD states.

“There are many tools we can implement. Green bonds seem to be the most accesible source of finance, but Africa represents only 1% of issuants of green bonds, so there is huge potential. The [foreign direct investment] can develop the energy infrastructure pipeline through the development of partnerships and contributions to development banks, as well as private sector participation.”

Policy development

Also speaking during the discussion, Thebe Mamakoko, Senior Energy Negotiator at the South Africa Department of Mineral Resources and Energy noted that within the broader context of climate change, South Africa had made clear commitments on how it will meet Net Zero, with policies and measures now in place.

“However, the Just Energy Transition Investment Plan is not going to be an easy process. Just to address the additional 40 000 km grid infrastructure that is required to ensure 60% of the energy uptake generated from solar and wind, we will require $2.7-billion over the next seven years,” he said.

He further believed that there was still a lot of work that needed to be done in addressing socio-economic issues alongside the acceleration to a green energy mix. “We encourage the penetration of renewables on the continent, but we are still dealing with issues of poverty and unemployment. How do we ensure that these developments contribute to the improvement of the lives of people?”

Makoko and Bel advocated for the development of policy at all levels.

“A lot more needs to be done on the discovery portion to understand the needs of the local communities, how they will be impacted and how the deployment of new technologies will also encourage beneficiation of the minerals that are being mined to build these plants. Partnerships need to be built in a way which is designed for immediate impact,” concluded Makoko.

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