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Invest in African Energy Forum to Boost African Renewable Growth through European Investments

The Invest in African Energy Forum in Paris is set to boost Africa's renewable energy sector by mobilizing European investments and fostering greater European participation in projects.

The Invest in African Energy Forum in Paris is set to boost Africa’s renewable energy sector by mobilizing European investments and fostering greater European participation in projects.

As demand for energy in Africa grows and the need to transition to a clean energy future becomes increasingly important, investing in Africa’s renewable energy sector will ensure dual goals of electrification and decarbonization are met. As such, the Invest in African Energy Forum in Paris, hosted by the African Energy Chamber (AEC) on June 1, presents a unique opportunity for French and European investors to advance investment in African renewable energy.  

While progress continues to be made to develop the continent’s renewable resources, Africa requires significant levels of capital to combat climate change and transition to renewable energy, with the African Development Bank estimating that a cumulative financing range of $1.3 trillion to $1.6 trillion and an annual investment of approximately $127.8 billion is needed. In 2021, only 0.6% of global renewable energy investment was allocated to Africa, significantly falling short of the continent’s needs. European nations, including France, should shoulder the responsibility of funding the development of Africa’s renewable energy sector if they truly want to facilitate this transition.

Africa possesses abundant renewable energy resources, including solar, wind and hydro, presenting lucrative opportunities across the power generation, green hydrogen and broader infrastructure fields, and projects are already taking off. The AEC’s State of African Energy Q1, 2023 Outlook reveals that Africa’s current announced renewables capacity stands at 134 GW for wind, 120 GW for solar, and 112 GW for hydrogen, demonstrating a strong pipeline of investment opportunities. French investors and companies have already begun to seize these opportunities on the back of a national pledge to increase France’s climate finance to €6 billion per year from 2021 to 2025, with a substantial portion of €2 billion specifically designated for adaptation efforts in developing nations across Africa. The country, alongside the European Union, also contributes to initiatives such as the Just Energy Transition Partnership with South Africa, offering crucial financial and technical assistance to support decarbonization efforts. Similar partnerships are being explored with other countries, aiming to equip them with the finance needed to develop the renewable energy sector.  

Notwithstanding finance, French companies continue to demonstrate a role in sharing technology and project expertise, driving project developments across the entire renewable energy value chain. French investment firms RGREEN INVEST and ECHOSYS INVEST launched the AFRIGREEN Debt Impact Fund in 2023 with an initial investment of €87.5 million. This fund aims to support solar power production in West and Central Africa, financing both on-grid and off-grid solar power plants for small- and medium-sized commercial and industrial consumers. It provides direct lending and asset-based debt facilities to developers and African companies, with a focus on enhancing solar infrastructure.

Additionally, the Government of Tanzania, the African Development Bank, and the French Development Agency (AFD) signed two development project loans totalling $300 million for the construction of the Kakono Hydropower Plant. Situated in the Kagera region of northern Tanzania, this 87.8-MW facility will reduce greenhouse gas emissions, comply with international standards, and support the country’s economic development. The project aligns with Tanzania’s goal of generating 5 GW of electricity by 2025.

What’s more, the integration of renewable energy into key sectors like mining, agriculture, and energy-intensive industries is crucial for Africa’s sustainable development. As France has some of the top technological and solution firms, French investors can collaborate with local stakeholders to develop tailored solutions that reduce environmental impact, enhance efficiency, and boost competitiveness. French renewable firm EDF Renewables’ partnership with South African company Pele Green Energy is a testament to this, with the companies working on the construction of a 100 MW power plant at the Mogalakwena platinum mine in South Africa.

With a number of market-focused policies being implemented continent-wide – such as South Africa’s Renewable Energy Independent Power Producer Procurement Program; policies under the Emerging Senegal Plan; and Namibia’s National Renewable Energy Policy, to name a few – Africa has become a highly attractive investment destination, and foreign players are urged to take advantage.

“As we move towards an energy transition, France has and will continue to play a vital role in financing African renewable energy,” says NJ Ayuk, Executive Chairman of the AEC, adding that, “Africa’s energy transition needs to be a just one and if Europe wants Africa to transition to renewables, they should fund the development of the sector. It is through the commitment of financial resources that we can unlock Africa’s vast renewable energy potential and foster sustainable development across the continent and worldwide.”

Stepping into this picture, the Invest in African Energy Forum in Paris connects French and European investors with African policymakers, enabling new deals to be signed across the burgeoning African renewable energy sector.

Taking place on June 1st, 2023, the Invest in African Energy Forum in Paris is open to all guests and RSVP is essential. RSVP to [email protected]

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