Increasing energy investment in Africa is key to the continent’s sustainable economic growth – News

Meeting Africa’s growing energy demand requires increased spending on clean energy projects and swift action to remove financial barriers so that investment can reach the required levels, according to a new report from the International Energy Agency (IEA).

Report, Clean energy investments for development in Africa, supports the flagship initiative launched today by the Italian G7 Presidency at the Leaders’ Summit in Puglia. The aim of the program, called Energy for Growth in Africa, is to support a strong pipeline of bankable clean energy projects in Africa and improve access to finance to make projects a reality, with a particular focus on technical assistance and building potential.

The IEA will be a key knowledge partner of this initiative, working with the United Nations Development Program which will focus on implementation. Energy for Growth in Africa – which will complement existing G7 member initiatives including the Partnership for Global Infrastructure and Investment (PGII), Global Gateway and the Just Energy Transition Partnership – will initially work with the Republic of Congo, Côte d’Ivoire, Ethiopia , Kenya, Mozambique, Nigeria and South Africa.

Clean energy investments for development in Africa outlines the opportunities and challenges of accelerating the sustainable development of Africa’s energy infrastructure. Despite the continent’s vast energy resources, it currently attracts only about 3% of global energy spending. About 600 million Africans still have no access to electricity, and more than 1 billion cook their meals over open fires and traditional stoves, using wood, charcoal, kerosene, coal or animal waste.

According to the report, meeting Africa’s growing energy needs, as well as the energy access, climate and development goals set by governments in the region, will require a more than doubling of annual energy investment to more than $240 billion by 2030, with about three-quarters dedicated to on to clean energy. The report identifies key investment target areas, including energy access, the energy sector and emerging industries such as critical minerals and clean energy technology production.

It also highlights strategies to increase financing for energy investments in Africa, which remains difficult due to higher perceived risks and higher borrowing costs compared to other parts of the world. In emerging and developing economies, the cost of capital can be two to three times higher than in developed economies. The report highlights that concessional financing is therefore crucial, especially when it comes to unlocking more funds from the private sector. IEA analysis shows that African energy systems require an average of $30 billion in concessional financing annually by 2030 to help realize the three-fold increase in private sector investment needed over the same period.

“The lack of access to energy in Africa is a great injustice, but increased spending on impactful projects can quickly turn the situation around.” IEA Executive Director Fatih Birol he said. “Our new report outlines the immediate investment priorities and financing mechanisms needed to quickly make these projects a reality. We are pleased to see this issue high on the G7 agenda and stand ready to work closely with our partners in Africa and beyond to turn promises into action, including through the G7 Energy for Growth in Africa initiative.

The IEA has been working on energy and climate issues in Africa for decades. It currently brings together five Association of Africa countries – Egypt, Kenya, Morocco, Senegal and South Africa – and collaborates with many others on a wide range of energy issues. In May, IEA and its partners hosted the first-ever high-level summit on clean cooking in Africa, where governments and the private sector raised $2.2 billion in financial commitments to make 2024 a turning point for access to clean cooking. kitchen.