How AfCFTA Can Help Solar Power Penetration in Africa

10 December 2020

Addis Ababa — Only about 43% of Africa's population has access to electricity, a number that is half the global access rate of 87%. This is according to the 2019 World Bank World Development Indicators; Demographic and Health Surveys; Multiple Indicator Cluster Surveys; National Surveys. Africa needs to catch up with the rest of the world, but with a growing population which is projected to double to nearly 2,4-billion by 2050, access to electricity is a critical challenge that needs to be urgently addressed.

Solar energy could be a viable alternative to satisfy the continent's electricity needs, as currently most of Africa's energy comes biomass and fossil fuels.

Presenting her paper titled, "Africa Beyond COVID-19: Solar energy in Africa' at a session of the African Economic Conference, Susan Pendame, an energy expert from Kenya, said there is a solid case for solar to aid Africa build back better in the post-COVID-19 era. She added that there is tremendous potential for renewable energy mainly due to the huge possibilities is using solar energy technologies. She said solar energy has become crucial as one in four healthcare facilities in Sub-Saharan Africa has no electricity, while only 35% of healthcare facilities have access to reliable energy. Pendame argued that the global COVID-19 pandemic has intensified the need to expand reliable energy to not only power healthcare, but also to enable remote work and online learning. Because of this, solar energy has emerged as the preferred solution due to the ease of deployment.

According to Pendame, despite the obvious merits of solar energy, there are many hurdles preventing its use in Africa, especially in post-COVID-19 recovery. She mentioned "non-bankable power purchase agreements (PPAs); off-taker credibility; technical capacity of grid infrastructure; contentious land rights; technical knowhow; low grid coverage/unreliable grids; lack of political will to implement policies; lack of skilled local technicians; upfront cost; proliferation of counterfeit goods and lack of skilled local technicians" as just some of the barriers.

To overcome these challenges, the energy expert prescribed, "developing well-articulated and coherent local policies; investing in enabling infrastructure, especially smart grids; encouraging research and development; developing/strengthening conducive policy environment; strengthening and clarifying land rights; broadening reforms to increase sustainable investment, and transparent procurement policies and cost-reflective tariffs".

With regards to leveraging the African Continental Free Trade Area (AfCFTA) to accelerate sustainable development, Pendame suggested that African governments "promote investment in solar energy, trade in energy through integration of power grids, allocation efficiency, technology and innovation sharing" as well as "facilitate affordability of electricity for low-income households".

The takeaway from Pendame's paper is that Africa needs to harmonise and coordinate energy regulation; cooperate on investment, intellectual property rights and competition policy; expand movement of skilled labour and create a dispute resolution mechanism as part of AfCTA. Pendame believes that, "the potential for trade in energy under the AfCFTA provides an excellent opportunity to achieve sustainable energy development."

The African Economic Conference is jointly organised by the Economic Commission for Africa, the United Nations Development Programme and the African Development Bank.

Concurrent sessions 3.2: Leveraging the African Continental Free Trade Area to accelerate progress towards inclusive and structural transformation

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