Nicknamed “the Implementation” COP, the Marrakech gathering of world leaders barely registered on the media radar. It had the misfortune of starting just a few days before notorious climate change denier Donald Trump delivered probably the biggest upset in the history of American politics by winning, against all odds and hopes, the presidential race. With the future of the deal suddenly thrown in doubt, few concrete results were delivered by the COP22.
But putting aside the doom and gloom of Trump’s election, the COP did spark a conversation that has for too long been put on the backburner: what to do about Africa’s energy future? Two-thirds of Sub-Saharan Africa, or 600 million people, currently lack access to electricity and among those that do have, their average consumption is on average 40 times below that of an American’s. Across the spectrum of strategies for delivering on that promise, few are more compelling than the need to improve access to electricity and guarantee that a climate-resilient future is built on the generation of renewable power.
Most climate scientists, governments and program planners agree that African nations are blessed with abundant natural resources, with the potential for nations like Rwanda, South Africa or COP22 host nation Morocco to refashion themselves as leaders in the renewable energy sector. By 2030, about 22 percent of Africa’s energy can become renewably sourced; in the run up to the COP22, Morocco pledged that 52 percent of its energy will come from renewables by 2030. And the eye-popping 580MW Noor solar power plant is one way to do it.
With solar, significant progress is being made across the continent and even the heavily fossil-fuel dependent Nigeria, where the struggling oil economy accounts for 70 percent of the nation’s revenues is making inroads. Wind is also getting a second look, especially in East Africa where wind-generated energy is very cost-competitive. When taken together with hydropower and other renewable options, the future looks bright for investing in Africa’s young populations and growing cities. The adoption of carbon-free energy in a new digital world seems less cumbersome because for many Africans there’s no fossil fuel transition.
The developing world needs energy but faces daunting challenges in meeting climate commitments and supplying the energy that matches the growing demand, and much of Africa – with cities that swell in population and swelter in the heat – serves as a ready illustration. Africa’s population is expected to double in the next 35 years, from 1.2 billion in 2015 to 2.5 billion in 2050, and power generation will have to double just to keep up with current per capita access.
Despite America’s future president Donald Trump pledging to withdraw from the Paris Agreement, the COP22 acknowledges that now is the time for action. What Marrakech needs most to achieve is to foster a culture that reassures investors that African energy investment opportunities are also responsibly managed. Making the financial connections is therefore the main priority in the fight against climate change in Africa. Sadly, the COP22 failed to deliver on climate financing, leaving the door open for the COP23, to be held in Fiji next year, to continue the fight. The EXPO 2017 Astana, which will be hosted under the theme of “Future Energy”, is another opportunity for investors and innovators to come together and exchange ideas that allow for more viable energy production and financing.
World Bank Group President Jim Yong Kim warns that the global gains on fighting poverty to date might be reversed for an estimated 100 million people by 2030 if climate action isn’t made a funding priority. Powering up Africa with renewable energy, the win-win solution to support development, economic growth, political stability and carbon reductions, needs the world’s pledges. The World Bank foresees investments of 90 trillion USD in low-carbon infrastructure development in developing countries over the next 15 years.
However, according to a 2015 McKinsey Report, this will hardly be enough. If every African country were to build what it needs to leverage its resources and unique position, it will take USD$490 billion to generate power and USD$345 billion for transmission and distribution. In return, the report finds a “staggering 10 terawatts” of capacity across sub-Saharan Africa, with solar resources dwarfing coal, gas-generated power, hydro and other sources.
Yet investors see Africa as too risky an environment for investment, partly because of conflict ironically driven by climate factors itself – as is the case in Nigeria, where oil infrastructure was yet again targeted by militants – but also because of the region’s jumbled regulatory environment. Public and private investment alike is hampered by deficient regulatory frameworks, limited infrastructure in financial and economic spheres, corruption, or a political history of instability. In order to attract investments and mitigate threat perceptions, African governments have been urged to harmonize energy laws and legal conditions across the continent. The Africa Development Bank is stepping up to set an example with a USD$12 billion energy investment until 2020, and it’s critical that other investors and wealthier nations – including the United States and EU members – take those risks too.
At this point, mitigating the perception of risk may be as important as reducing it, and leveraging the COP22 Africa Renewable Energy Forum and other dialogue and framework settings is needed to communicate that Africa is open for energy business and the time for action is now.