Published in Invest Africa on 14.12.23
Published in The Africa Report on 18.12.23
Published in Business Daily on 27.2.24
Amid the global energy transition, Africa stands at a critical juncture, poised to accelerate its energy access through transformative technological advancements. As we begin to move from pledges to concrete action following crucial conversations at COP28, it is imperative to address the unique challenges and opportunities that Africa faces in its drive towards eradicating energy poverty on the continent.
At COP28, I shared the challenges and opportunities that Africa and the Global South must address as we advance towards the adoption of renewable energy for the continent. As we know, 600 million Africans have no access to power. This is more than the combined populations of the USA, UK, and France.
As investors in the energy sector, we should focus on increasing the availability, access, and affordability of energy as key drivers to eradicating energy poverty in the Global South.
Even as we begin to see the benefits of emerging technologies, the reality is that energy innovation remains largely out of reach for the Global South. I am calling for new technologies to be developed, that will drive us from phasing down to phasing out fossil fuels. However, these technologies cannot solely work within a European or American energy context – our approach must consider different energy realities like in Africa and the Global South.
The best and most sustainable approach will be to phase down fossil fuels gradually while growing energy access and testing new technologies. As power availability increases and technology evolves, only then will the region also be able to phase out fossil fuels completely.
How do we achieve this while prioritising access?
The issue of affordability in financing plagues investors in the sector. Most financial institutions are not keen to fund start-up projects, creating a vacuum for the private sector to explore locally available and modern technologies for value addition. The existing financing models require elevated levels of due diligence which cannot be guaranteed with energy projects that depend on renewables. This automatically makes most projects un-bankable and high-risk from an investment perspective.
Additionally, policies and regulations across African jurisdictions have yet to mature enough to support investment of these new technologies. There is no existing blueprint for approval and implementation of these emerging technologies and regulation is being applied in relation to existing expertise which is often untenable. Implementation if at all, then becomes a lengthy laborious and expensive exercise that investors would naturally shy away from. Clear permitting and licensing regimes can reassure investors that projects will not suffer prolonged delays due to onerous and lengthy approval procedures, minimising project costs.
Technological advancements should include simpler solutions such as bioenergy technologies that use wood fuel or biochar for cooking to reduce emissions. Currently, 2.9 billion people worldwide rely on solid fuels to meet their cooking and heating needs. Wood fuels are the most popular as it is readily available and the most affordable. According to the World Health Organisation, an estimated 2% to 7% of global anthropogenic emission is attributed to greenhouse gasses, most of it coming from the production and use of firewood and charcoal. These pollutant gases, especially when used in inefficient biomass cooking stoves in indoor environments with limited ventilation, are estimated to contribute to 3.2 million deaths annually, more than Malaria. There is a need to prioritise transition away from non-renewable biomass-fired stoves by providing highly efficient biomass-fired improved cookstoves. Supporting the development of innovative clean cooking technologies offers alternatives to remote and off-grid communities.
Despite the challenges that exist, the Global South can still begin to move towards a green transition. Hybridisation can serve to increase access and affordability while enabling scalability. This strategy can accelerate accessibility at an affordable price which is important if emerging economies are to realise the benefits of energy technology. The development of Liquid Natural Gas (LNG) as a transition energy will ensure accessibility and affordability.
Investing in microgrids is another avenue to increase access. Hybrid microgrid technologies that can be powered by wind, solar or mini-hydropower are scalable, achievable and can be developed at more affordable costs to the end consumer. These natural sources are free and readily available in Africa. What is lacking is the firm power to enable the implementation of these. With a hybrid approach, the right financing model and policies, the Global South can begin to advance towards a phaseout of fossil fuels and accelerate the transition.
Take the example of Tanzania, where the benefits of gas have already been realised. Compressed Natural Gas (CNG) is emerging as a green and sustainable solution to reducing the costs of fuel for motorists in the country. This year, Dalbit (part of the Janus Continental Group) worked with Egyptian energy company TAQA to construct an integrated CNG station that allows motorists to convert their vehicles from liquid fuel combustion to CNG combustion. This was a pan-African operation, supported by the Tanzanian government to increase the use of its natural gas reserves as a cheaper alternative to consumers. Vehicles that use CNG instead of liquid fuels are greener, cleaner, and estimated to emit approximately 25% less CO2.
For these new technologies to be quickly adopted, regions must align their policy, regulatory and financial models to fast-track projects.
Public-private partnerships emerge as a cornerstone of accelerating energy access in the region. The collaborative synergies between governments, businesses, multi-lateral organisations and non-profit organisations have the potential to unlock financial resources, share expertise, and create an enabling environment for sustainable energy projects. This can ensure the availability of patient equity and affordable debt for local businesses to accelerate energy access. I continue to urge stakeholders to scale up and replicate these models across the continent.
The critical factor for stakeholders in the energy sector now is to align their efforts, share best practices, and forge partnerships that will propel Africa and the Global South towards a future where reliable and sustainable energy is accessible to all. In embracing innovative solutions and harnessing the power of technology, the Global South will not only address its energy challenges but emerge as a trailblazer in the global pursuit of a clean and equitable energy future.
