THE WORLD Economic Forum (WEF) has warned that it is critical that existing finance continues to target cleaner energy solutions to meet the financial requirements for Africa’s future energy needs.
The WEF said Africa’s power sector would play a central role in the transition from fossil fuel-driven power generation to a renewable-strong energy mix.
A new White Paper outlining the key considerations in setting the course for Africa’s energy future was released last week at the 2021 Sustainable Development Impact Summit.
The report, “Financing the Future of Energy,” outlines Africa’s electricity landscape and financing options in context with the global drive to reduce carbon emissions.
According to the WEF’s White Paper written in collaboration with Deloitte, the migration to a multi-stakeholder-oriented net-zero power grid is being driven by decarbonisation, decentralisation, and digitalisation.
The report contends that new coalitions and investments with developed nations and NGOs including the WEF must co-ordinate and enable countries to leapfrog existing technologies and infrastructure.
“The need for digitally smarter utility platforms and sustainable development programmes will guide global leaders in helping to shape equitable and inclusive recovery programmes,” said WEF’s head of Africa, Chido Munyati.
“The entire continent remains vulnerable, but this White Paper offers a view on what are viable financing options that exist today for clean energy sustainability and equitable recovery for all of Africa.
There has been a significant drive to reduce carbon emissions, specifically from energy-generating activities which are estimated to contribute to 70 percent of global greenhouse gas emissions
The energy portfolio and infrastructure investments by the WEF’s Africa 50 showcases the success of private and public sector participation.
Commercial lenders such as Absa are not left out in its support of mainstream renewable projects, and emerging development facilities as initiated by the Development Bank of Southern Africa through its recently launched €200 million (about R3.5 billion) green bond facility provide a clear integrated framework that supports climate neutrality.
Deloitte’s director for Africa power and utilities, Mario Fernandes, said that funding would be the biggest hurdle to ensuring Africa’s sustainable transition to renewables at scale.
“Africa’s winners will be the ones that are able to leverage what exists while creating an enabling environment for the private sector through a Renewables Energy Investment facility,” Fernandez said.
WEF said that while Africa’s contribution to greenhouse gas emissions from fossil fuel significantly lagged behind those of other continents, it still carried a huge potential to accelerate the transition to a net-zero future.
Currently, half of the continent lives without adequate access to electricity.
As energy demands increase, the WEF said that the energy gap could be bridged through clean energy alternatives, if the financing solutions were employed now.