Energy transition central to Africa’s economic future

An integrated policy framework built around the energy transition could bring a wave of new sustainable energy investment to Africa, growing the region’s economy by 6.4% by 2050, according to the International Renewable Energy Agency (IRENA) and African Development Bank.

In their recently published report, ‘Renewable energy market analysis: Africa and its regions’, Africa is shown to be prospering from development enabled by renewables, while greatly improving energy access and offering significant welfare and environmental benefits to people across the continent.

Africa’s vision for an energy transition aligned with global climate ambition should see the continent generating 26mn more economy-wide jobs by 2050 than anticipated under ‘business as usual’ scenario plans. Jobs created through the energy transition in Africa could outstrip fossil fuel related job losses by a factor of four, presenting a significant net gain to regional economies, suggests the study. Around 2mn people currently work in the fossil fuel sector in Africa.

The energy transition offers ‘a unique opportunity for Africa to meet its development imperatives’ says IRENA Director General Francesco La Camera. ‘Through tailored policy packages, African countries can harness their strengths and resources to overcome long-established structural dependencies,’ he continues.

‘Africa is endowed with abundant renewable energy sources, upon which it can sustainably base its ambitious socio-economic development. However, this requires strong political commitment, a just and equitable energy transition framework, and massive investments,’ adds Dr Kevin Kariuki, Vice President for Power, Energy, Climate & Green Growth, African Development Bank. ‘The African Development Bank is committed to supporting the continent’s energy transition, by facilitating increased private sector investments through its expanding range of green finance instruments, including the Sustainable Energy Fund for Africa.’

Coal, natural gas and oil together account for about 70% of Africa’s total electricity generation today and conventional power attracts far more funding than renewables in Africa, due to an established process that favours less capital-intensive thermal generation, the report notes. Energy transition finance must become more readily accessible. Coordinated efforts should be made to ensure public spending – the dominant source of energy transition finance in Africa – clearly prioritises renewables, it says.

Of the $2.8tn invested in renewables globally between 2000 and 2020, only 2% went to Africa, despite the continent’s enormous renewable energy potential and its need to bring modern energy to billions of citizens still lacking access. While the rate of access to energy in Sub-Saharan Africa rose from 33% to 46% over the last decade, rapid population growth meant 570mn people still lacked electricity access in 2019 – 20mn more than 10 years ago. About 160mn more people lacked access to clean cooking over the same period, says the study.

‘Enabling African countries, which have contributed little to historic greenhouse gas emissions, to develop, while recognising the need to address the climate emergency is imperative,’ concludes La Camera. ‘International cooperation, including South-South cooperation, will be key to mobilising resources and know-how at the scale and speed proportionate to the needs of Africa’s economies, its communities and its people.’