In the tumultuous journey of our planet, the year 2022 left an indelible mark as global emissions soared to a staggering 36.8 billion tons of CO2. Fast forward to 2023, and we find ourselves on the precipice of history, with rising temperatures breaking records and ominous warnings from climate scientists. The European Union’s climate change service now forecasts 2023 to potentially be the warmest year ever recorded.
Amidst this environmental turmoil, a grave reality emerges — a looming threat of energy poverty coupled with the devastating impact of climate change, particularly on the most vulnerable populations globally. Shockingly, 775 million people still lack access to the most basic electricity, with a staggering 600 million residing in Africa. The urgency intensifies as we confront the explosive combination of population growth and these challenges, predicting outcomes of unprecedented severity unless we unite to overcome these monumental hurdles.
Africa, responsible for a mere 3% of global emissions, bears an annual economic loss of USD 7–15 billion due to climate change impacts. This figure is projected to skyrocket to USD 50 billion by 2030, according to the African Development Bank Group (AfDB). The continent also faces a climate finance gap of USD 213 billion between now and 2030, accentuating the urgency of the situation. Compounding these challenges, Africa boasts the fastest-growing population globally, expected to reach 2.5 billion by 2050, as per the United Nations.
The solution? We must implement sustainable, reliable, and affordable energy solutions to navigate this turbulent terrain.
In a matter of days, COP28 will assemble visionaries capable of transforming this vision into reality. The call is clear — COP28 must transcend global and geopolitical challenges, channeling the collective will and action required to convert information sharing and vague recommendations into tangible, actionable plans. What matters now is the relentless pursuit of implementation for the desired change.
The imperative falls not only on global leaders but on regional and global development finance institutions, energy decision-makers, governments, and corporations alike. Together, they must commit to supporting Africa in constructing the energy future it so desperately needs.
Acknowledging the current challenges, it’s disheartening to note that, despite accounting for a fifth of the global population, Africa has attracted a mere 2-3% of global energy investment. Historically, the high risk profile of projects in Africa, coupled with exorbitant financing costs, has impeded progress. The aftermath of the Covid-19 pandemic and geopolitical tensions only exacerbated the situation, leading to the abandonment of numerous green energy projects.
To unlock a wave of clean energy spending in Africa, the AfDB and IEA propose a crucial step — the easing of financing costs. Currently, the cost of capital for energy projects in African countries is 2-3 times higher than in advanced economies and China. To achieve the ambitious goal of delivering modern energy to all Africans by 2030, we must double the current energy investment in Africa, requiring over USD 200 billion in spending per year, with two-thirds directed towards clean energy.
Two recent announcements offer a glimmer of hope in mitigating climate financing challenges and highlighting the commercial prospects of sustainable energy projects in Africa. The African Development Bank’s commitment of USD 25 billion in climate finance by 2025, with USD 20 billion allocated to the Desert to Power program, is a significant stride. This initiative aims to develop 10,000 MW of solar across eleven Sahel zone countries, providing electricity for 250 million people.
Additionally, the #COP28 finance initiative between the United Arab Emirates (UAE) and Africa, in partnership with Africa 50, seeks to kickstart a pipeline of bankable clean energy projects. By deploying USD 4.5 billion to catalyze an additional USD 12.5 billion from various sources, the initiative aims to develop 15 GW of clean power by 2030.
As we stand at the cusp of COP28, Africa faces a rare opportunity to accelerate its energy transition. However, this hinges not just on financial support but also on robust governance. African governments must intensify efforts to improve climate governance and policy frameworks, address corruption, curb emissions, and facilitate investment in clean energy solutions and infrastructure.
The journey toward energy security and a just transition for Africa is well-defined. Attention is turning towards the funding challenge, but governance remains a critical piece of the puzzle. As we approach COP28, African governments must seize this pivotal moment, taking concrete actions to unlock the substantial support at their disposal. The decarbonization opportunity isn’t just an environmental necessity; it’s a tipping point for a new market and accelerated industrialization. The time for action is now, and Africa stands on the precipice of a transformative energy future.
If you are inspired by the vision of shaping Africa’s energy landscape and contributing to a sustainable, just transition, we invite you to connect with HRLeverage. Our commitment to driving transformative change aligns with the core themes of this article. To explore collaboration opportunities, reach out to us via phone at +254 101 714 411 or drop us an email at info@hrleverageafrica.com.
Let’s work together to make a positive impact on the continent’s energy future and empower communities through strategic initiatives. Your involvement is a crucial step towards creating a greener and more prosperous Africa.