Your Excellency, Daniel Kablan Duncan, Prime Minister of the Republic of Cote d'Ivoire. Your Excellency, Lionel Zinsou, Prime Minister of the Republic of Benin (thank you so much: this is your third time at the African Development Bank in one week!); Your Excellency, Thomas Luhaka, Vice Prime Minister of the Democratic Republic of Congo, Honorable Ministers, the Assistant Secretary General of the United Nations and Deputy Executive Director of the United Nations Environmental Program (UNEP), Ibrahim Thiaw, Tony Elumelu, Co-Chair of the African Energy Leaders Group, Executive Directors of the Bank and my colleagues, invited guests and partners, ladies and gentlemen. It gives me such a great honor to welcome you to the African Development Bank.
I wish to thank Mr. Kofi Annan, the former United Nations Secretary General for his inspiring address to us via video, which you will watch shortly. As I have always said, Mr. Annan is "Africa's jewel and contribution to the world". I thank him and the members of the Africa Progress Panel for their wonderful work on the Africa Progress Panel 2015 Report that focused on "Seizing Africa's Energy and Climate Opportunities.
This week we are all 'energized'. We call it the Energy Week at the African Development Bank. And I can feel the energy in this room, from the presence of Prime Ministers, Ministers, private sector leaders, entrepreneurs, development partners and many more joining us across the world through our web stream.
On September 1, 2015, I took my oath of office as the 8th President of the African Development Bank. In my inaugural speech, I laid out the five priority areas that we will focus on as a Bank to help advance the transformation of Africa: Light up and Power Africa was at the top of my priority list. Two weeks on, I am delighted that the Bank and its partners have fully engaged in a series of dialogues marking the Energy Week in Abidjan. I am very pleased to see many important players in the energy sector - representing public sector, private sector and the civil society - here today to help us jointly develop what we refer to as the "New Deal on Energy in Africa".
Lack of energy is the most critical challenge facing Africa today. Over 645,000 Africans do not have access to energy. Africa has the largest energy poverty in the world. It has been like this for so long that we forget that lack of energy is not normal. The abnormal has become the normal.
Small businesses languish for lack of power, children underperform for lack of electricity, as over 90% of Africa's primary schools lack electricity. Lives are at risk in our hospitals for lack of electricity as life saving hospital equipment and services lie unused because of lack of electricity.
We must change. Africa can no longer wait. Just like blood is to the body, so is energy to the economy. An economy that has no electricity is only dying, slowly. Africa's growth and prosperity depends on solving the crisis on energy. It will require a greater level of commitment than ever seen before, for Africa's present and future depends on it. We cannot simply be content with small ambitions on energy in Africa. We must all rise up and do more - and do so faster and at scale. And we must act differently, by building strategic partnerships on energy in Africa that allows us to reach a greater level of ambition and delivery.
Africa must lead. Only the person that wears the shoes knows where it pinches. And not having energy in Africa pains. It costs Africa about 2.4% in GDP loss annually. It pains that over 600,000 women and children die every year from the impacts of indoor pollution, simply cooking for their families. It pains to watch a young African child, desperate for an education handicapped simply because of lack lighting in their home. It pains to see our agricultural fresh produce rot on the streets, because of lack of refrigeration. It pains even more when we have the capacity to change the situation, yet that capacity remains untapped.
Africa is rich in energy resources, but poor in energy supply and access. Ladies and gentlemen, listen to our potential. Africa has potential for 11 terawatts of solar energy, 350 gigawatts of hydropower, 110 gigawatts of wind power, and an additional 15 gigawatts of geothermal potential. Yet, the continent generates the same level of electricity as Spain or Belgium. With these immense resources, Africa should accelerate investments in technology, innovations, policies and regulations to speed up a renewables revolution. Africa cannot power its homes or businesses with potential. Africa must unlock its huge renewable energy potential and combine this with conventional energy to light up and power Africa.
The African Development Bank will raise its level of ambition and engagement for energy for Africa. This is why we are working with partners to launch the New Deal for Energy for Africa. We salute the great efforts of all those that have triggered the wind of change on energy. President Obama's bold initiative on Power Africa is highly commendable, so is the effort of the EU-Africa Energy Partnership, G7, G 20 and the Sustainable Energy for All of the UN Secretary General Ban Ki-Moon. Bilateral efforts from the UK to Norway, Germany, France, China, Netherlands, Japan are all creating new waves of support.
Now, we all must do more and together! The Africa Progress Panel Report of 2015 led by Kofi Annan, laid out a clarion call: we must do more and do so faster. As a Bank, we heed that call. Africa must unlock all of its potential, conventional and renewables, and develop energy mixes that will not only light up Africa but also power industries.
Our collective aspiration must be high and we should drive for universal access to energy in Africa by 2030. For this to happen, under the New Deal on Energy for Africa, five elements will be critical. First, as Africa's premier development finance institution, the African Development Bank will significantly expand its support towards energy in Africa. Second, our development partners will also need to scale up on-going efforts. Third, countries will need to expand their share of financing going into the energy sector. Fourth, stronger political will, will be needed. And finally, we as partners must work together, coordinate our efforts to drive critical policy, regulatory reforms of the energy sector to improve incentives for accelerated investments.
A lot of financing will be needed. Together, we must close the $55 billion financing gap for energy in sub-Saharan Africa. And we must raise our level of commitment to meet the $22 billion needed to support universal access to energy in the region.
These numbers should not throw us off. Africa and the global community have what it takes to meet this challenge. Domestic resource mobilization holds the key. If Africa only uses 10% of the total amount of $500 billion in tax revenues collected every year on energy, will we not solve this problem? If we end the over $60 billion annually in illicit financial flows out of Africa, will we not solve this problem? If developed countries meet the 0.7% commitment for Gross National Income for development assistance, over $178 billion can be generated. Will we not solve this problem?
Multilateral development banks such as the African Development Bank, the World Bank and bilateral finance agencies can leverage their balance sheets with greater co-financing arrangements and use of partial risk guarantees for public and private sector investors. By focusing on project development, pipelines of bankable projects can be developed, for financing. This is why the African Development Bank supported the establishment of Africa 50 to help countries to develop transformative and bankable projects, while supporting project financing.
We must do all possible to support women who suffer the most from reliance on using solid biomass to cook, with children on their backs, working so hard to feed their households. They walk kilometers to fetch water, and then must rely on fuel-wood and charcoal and endure live threatening fumes. They want clean cooking stoves but majority are too poor to afford them and lack finance to invest in them. For them, hope is right here, as the New Energy Deal on Africa will push for the establishment of a Bottom-of the Pyramid Energy Financing Facility for Africa. This should support some 700 million people to afford clean cooking energy stoves. The cost is well within our reach to provide, for it will take only $4.2 billion to solve the problem. We can and must solve their problem - and do so quickly.
But we must also ensure that inequality of access to energy is addressed, especially for millions of energy-poor households in rural areas. For them, the cost of the last mile of connection to national grids is expensive - and will take time. Today, the revolution on off-grid and mini-grid systems provides a unique opportunity to short-circuit their access to affordable energy. Just like it occurred in the mobile phone revolution that swept across Africa, making Africa the leader in the world in terms of mobile phone ownership, we are at the cusp of yet another revolution: clean energy revolution from renewable energy delivered via decentralized energy systems. We must bring energy closer to people and we must ensure that it is affordable.
I am excited today that we have in the room, several young energy entrepreneurs who are blazing the trail. They are supported by the West Africa Forum for Clean Energy Financing within the African Development Bank. Femi Oye, a young entrepreneur from Nigeria who is here with us today, developed a biofuel gel made from biomass waste to provide clean energy stoves for women. Moved by the loss of his grandmother from lung cancer and kidney damage from cooking with charcoal and kerosene, he innovated, and solved a problem - even if it was too late for his grandmother. Today, some 350,000 households in Nigeria, Benin and Ghana use his technology. For them, they have ended the use of kerosene. Governments should move subsidy away from kerosene to clean cooking energy.
The Women Barefoot Solar Engineers, which includes some grandmothers, are delivering energy in rural areas. New innovation on payment systems allow low income households to own stand-alone power sources for their homes, using solar technology, while mobile payment systems make it possible for them to pay as they go. They have access - and they are empowered. Now, governments need to encourage these energy innovators and entrepreneurs with fiscal incentives that reduce the costs of their operations.
To drive renewable energy initiatives in Africa, African Heads of State, under the auspices of the African Union, launched the initiative on the Africa Renewable Energy. The Bank is a partner in this effort. I wish to highly commend the support of the G 7, led by France and Germany, for this initiative. And the Bank is pleased to host the team drafting the initiative this week. The Bank looks forward to working with all partners to finalize this African-driven agenda, which is crucial to accelerate support for renewable energy and transition efforts towards green growth in Africa. Let me state that Africa deserves a special facility for financing renewable energy in Africa and it should be hosted within Africa. This is critical for the success of the COP 21 delivery for Africa in Paris.
To drive Africa's industrial growth, we must push further for the development of major regional energy projects. The Grand Inga dam alone, if well completed, will provide energy to about 500 million people in Africa with renewable energy. It is strategic and we must work together to get this done, while paying attention to social and environmental safeguards. And Africa should develop its energy mix, based on what it has, with a regional approach and taking into account resource endowments. No one size will fit all. And Africa must develop from what it has. We must promote greater regional trade in energy by strengthening our support to the regional power pools in line with the Program for Infrastructure Development in Africa. Collectively, we must support power purchase agreements that will unlock opportunities for investments by the private sector.
Today, Africa is witnessing a rapid growth in private sector investments in Independent Power Projects. We have with us right here today one of the successful energy leaders and investors, Tony Elumelu, who spearheaded the Africa Energy Leaders Group. Over $4 billion annually is now devoted by private sector investors to Independent Power Projects across sub-Saharan Africa. South Africa today leads on independent power projects for renewable energy with close to $14 billion in expected investments, from wind to solar energy. As part of the New Deal on Energy for Africa, we should accelerate the use of risk sharing and mitigation instruments, development of Africa-based political risk insurance systems and power purchase agreements to drive greater investments by the private sector.
Political will is crucial to light up and power Africa. That is why we are excited with the strong presence with us today of your Excellencies, the Prime Ministers, the Vice Prime Minister and Honorable Ministers. With your presence, our voice is strong: Africa's time has come. The task is immense, but the benefits will be huge. By reforming utilities, ending subsidies that promote reliance on fossil fuels and ensuring cost-reflective tariff structures, Africa will be able to mobilize investments to solve its energy challenge - at scale.
But for this to happen, we all must work collectively together. As the African proverb says "if you want to go fast, go alone. If you want to go far, go together". Africa must go far and solve its energy challenge by 2025. And for that we must move together. This is why at the Bank we have proposed the formation of the Transformative Partnership on Energy in Africa. Under this, we will pull together to drive the needed reforms in Africa's energy sector to achieve the universal access to energy by 2025. Success lies just ahead of us!
My colleagues and I at the African Development Bank, including our Board of Directors - many of whom are joining us here today - look forward to your co-development of the New Deal on Energy for Africa.
Thank you very much.
