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AFRICA ENERGY INDABA APRIL 2013
What Is Needed for Sustainable Energy for Africa?
The African Development Bank is at the forefront of initiatives aimed at providing energy access, and providing energy availability to Africans. The Bank’s Southern African Director; Dr Ebrahim Faal delivered a presentation at the 2013 Africa Energy Indaba in February 2013 along these lines. He looked at Africa’s energy landscape and presented the topic, “Towards Providing Sustainable Energy in Africa”. In this newsletter, we take a look at the important issues covered in his presentation.
While Africa has plenty of energy resources, its energy statistics are not good. Eighty-percent of the world’s population without electricity lives in rural Sub-Saharan Africa where per capita consumption is only 124KW per year. Ninety-three percent of Africa’s hydropower potential is untapped and less than 10% of Africa’s hydro-electric power potential has been exploited. Africa also has the highest solar irradiation in the world.
Access to energy is critical to economic growth and development, and is the key to the achievement of the Millenium Development Goals (MDGs). While two thirds of African economies are expected to grow around 6.2% this year, which is still below the 7% needed to make a sizeable dent in poverty levels, it is nevertheless remarkable. Greater access to energy is needed in order for economies to grow at levels beyond 6.2% up to 7%. Sustainable economic growth in Africa can only be realised through greater provision of energy access and availability. If MDG related targets are to be met by 2015, access to energy needs to rise from the present low levels of 27%, to 64%. Dr Faal identified a number of key initiatives that need to be done in order to ensure a supply of sustainable energy in the African continent. These included:
· Governments in Africa need to enact energy policies that will produce reforms in the energy sector with regard to cost reflective tariffs that support vulnerable customers.
· The promotion of regional integration through NEPAD.
· The private sector needs to play an increasing role in energy infrastructure development.
· International finance institutions need to mobilise financial support;
· Implementation partnerships need to be crafted across development partners, governments, regions, between South-South, and between public & private sectors in order to accelerate and upgrade Africa’s infrastructure delivery.
Current African Development Bank projects include the following outcomes:
· Distributing electricity solutions in a number of rural electrification projects in Burkina Faso, Guinea and DRC.
· Working within some low-income countries in scaling gap renewable energy within the framework of climate investment funds, plus within the UN’s ‘Co-generation for Africa’ project.
· Projects for improving grid infrastructure and supply efficiency in on-going regional transmission projects, in Sierra Leone, Cote d’Ivoire, Liberia, and Guinea, which will connect fragile states through to the other countries in the West Africa Power Pool and lay the foundation of leveraging the HEP potential of Guinea.
· Facilitation work that includes institutional capacity building and development of policy and regulatory frameworks for enhanced regional collaboration.
· Involvement in large-scale renewable energy projects, for example Inga HEP project in the DRC, and concentrated solar power 500 MW plant in Morocco, as well as wind and energy projects.
· Engaging with clients in energy planning and policies; the ADB has a wealth of experience in advisory services, and as such provides guidance and support in issues such as reforming regulatory frameworks, improving governance and creating an enabling environment for private sector development
· Developing innovative financial instruments to meet specific African challenges. For example in 2011 established a SEF [Sustainable Energy Fund] for Africa that provides SME’s in the energy sector with project preparation grants and growth capital through private equity vehicles. Another innovative instrument in the pipeline is the mobilisation of additional finance from sources such as African Central Bank Reserves, African Pension Funds, the African Diaspora, and high net worth individuals on the continent.