DATABASE
TOWARDS A PROSPEROUS AND SUSTAINABLE AFRICA MAXIMISING THE SOCIO-ECONOMIC GAINS OF AFRICA’S ENERGY TRANSITION
completed
Link
www.irena.org
Abstract
How will member States maximise the socio-economic benefits associated with sustainable energy development and clean energy transition in Africa? First, we must ensure that investment flows to Africa are commensurate with its potential returns. Beyond correcting the risk profile of Africa, we need an attractive regulatory and business environment. Through collateral investments in social infrastructure and by committing to leave no one behind, we face a better chance of increasing the socioeconomic benefits of energy transition related investments. Second, we will need to focus on the manufacturing and value addition opportunities in green technologies, including recycling and repurposing of batteries. Clean energy technologies are dependent on components that rely on rare minerals from Africa. The energy-mining industry cluster offers viable opportunities for value addition. Industrial strategies and local content policies compatible with national strategic advantages should support this value-addition drive. Third, member States should explore de-risking instruments to mitigate the cost of investment in energy projects. Moving beyond risk perceptions, real risks need to be managed to sustain large-scale investments. This could be further supported by innovative financing schemes, such as the SDG7 bond initiative ECA is implementing. Fourth, partnerships are crucial in supporting not only financing needs, but also strengthening institutional and human capital gaps through exchange of experiences. The system of governance and institutional capacities should be brought to compatibility with ambitious clean energy transitions. Finally, the potential costs of energy transition to segments of the society, such as in coal-dependent energy systems and oil-exporting countries, will need to be carefully evaluated, appreciated, and taken into consideration in devising transition plans. Africa today has vibrancy, as a youthful continent, and a tradition of enterprise and resilience. The continent has in-built nimbleness enabled by mitigated lock on technologies of the past. In some areas, it is starting nearly afresh. This offers Africa an operational strategic edge to adopt and pursue sustainable solutions without substantial legacy costs. By accelerating progress, leveraging the immense potential of partnership with the private sector using strategies outlined in this report, Africa can leverage existing opportunities to accelerate its development, provide jobs and improve livelihoods.
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