Balaclava, Mauritius, 9 December 2022 (ECA) - Africa’s just energy transition should deliver affordable and clean energy through leveraging partnerships to unlock and increase financing, development experts say.
Speaking at a High-Level Dialogue of Development Partners on Just Energy Transition in Africa, on the sidelines of the African Economic Conference underway in Mauritius, panelists agreed that Africa should accelerate just transition to eliminate energy poverty on the continent.
The Deputy Executive Secretary and Chief Economist of the Economic Commission for Africa (ECA), Hanan Morsy, said Africa was making a transition with new renewable technologies that were not there before.
We now have the opportunity to leapfrog in terms of development and meeting our energy needs. We need to harness and utilize these new technologies. We don't need technologies of the past which are not beneficial for us,” said Ms. Morsy commenting that Africa has 60 percent of the global potential for solar power which should be tapped.
Highlighting the importance of credit for nature and credit for climate swaps in light of the high costs of financing for Africa, Ms. Morsy said being able to finance development projects at an affordable price was key. She alluded to the fact that many countries have raised finance through philanthropy.
“We need to move from millions to billions and that is beyond the role of philanthropy. We need the role of de-risking to be taken at a grand scale and we need countries to provide guarantees and it can be possible to do these swaps at affordable rates,” she said.
The ECA Chief Economist said crowding in the private sector was critical as Africa has 14 percent of the total climate finance compared to 50 percent in other regions like Asia and Latin America. She outlined blended finance, private guarantees, and equity investments as some of the elements critical in crowding in the private sector as well as harnessing regional Multilateral Development Banks (MDBs).
The panel discussed possible pathways to a just energy transition in Africa and identified concrete recommendations such as public and private sector partnerships. Africa has 17 percent of the global population and emissions of 3 percent, a huge energy deficit of 600 million people out of 800 million globally without access to electricity. Furthermore, 40 percent of people in Africa do not have access to clean cooking energy and in that context, it was crucial to close the energy gap in promoting green transition.
“If we were to use gas to double our generation capacity that would only increase emissions by one percent of global emissions so the increase in emission is relative to the benefits of using natural gas, hence natural gas needs to form part of our transition,” Ms. Morsy added.
“If Africa was to be fairly compensated for its carbon credits from sinks such as the Congo Basin that would avail huge amounts of financing which would support the continent’s adaptation and mitigation activities.”
Panelists argued that improving energy access in Africa in the context of SDG7 goals and Agenda 2063 requires game-changing policies and investment.
However, such an ambitious goal should be pursued within the context of a transitioning energy system that leverages the continent’s immense clean energy potential while phasing-out carbon-intensive technologies and resources. It is estimated that energy transition goals that respect a 1.5°C scenario offer Africa a 6.4% higher long-term growth prospect than without transition.
Victoria Kwakwa, World Bank Vice-President for Eastern and Southern Africa, noted that Africa’s current energy mix comprised 76 percent renewables and the focus therefore should be on access. Access will be guaranteed through a long-term fundamental approach that recognizes all players including the private sector. She said governments had the responsibility of creating a conducive environment and the right policy and regulatory frameworks that allow the entry of the private sector.
“We need about $200 billion to get to the 600 million people that do not have access and it should not come from the private sector alone, we need public sector resources to be used strategically to catalyze private and public partnerships coming together,” said Ms. Kwakwa.
The current structuring of climate finance was problematic, panelists said.
Ms. Ahunna Eziakonwa, UN Assistant Secretary-General, United Nations Development Programme and Regional Director for Africa, underscored the need to reset multilateralism which has taken a hit from the current global crises so that it reflects a just energy transition and justice.
Just energy transition was not handouts to African countries but justice and ensuring affordable and accessible energy for more than 600 million people without access to electricity, Ms. Eziakonwa argued.
“We have 900 million people that need to transition from biomass, particularly the coking energy that is killing women and stifling opportunities for the younger generation, this transition must happen. We have for decades invested in biofuels and never achieved it. Why? This is a low-hanging fruit that one could invest in.``
Africa has abundant energy sources like green hydrogen and natural gas which must be tapped and paid for at a fair price, Ms. Eziakonwa said, warning that Africa should avoid presiding over another extractive industry where energy sources are extracted by other countries that leave the environment damaged as has happened with fossil fuels like oil and coal. She cited that Africa has the deepest carbon sinks but the market price for carbon was embarrassing and unjust for Africa to leverage its carbon sinks.
Contributing to the discussion, Kevin Urama, Acting Chief Economist and Vice-President, of the African Development Bank Group (AfDB), said in discussing just energy transition, there is a need to think about the principles of justice as they apply to climate change in Africa. There is moral justice where polluters have the responsibility to clean up and distributive justice in terms of African citizens being entitled to the same amount of carbon dioxide emissions as everyone else.
“Africa still has a lot of headroom in regards to per capita emission required to meet the climate goals we have all agreed to,” said Urama adding that “We do not have energy. We need energy before we can start transitioning. The question is how do we get our energy in a way that we do not rapidly use up the carbon headroom that we have and go to the level of those that are creating the problems that we need to catch with moral justice, distributive justice, or criminal justice.”
Richard Munang, Africa Regional Climate Change Coordinator of the United Nations Environment Programme (UNEP), said Africa’s just transition context was informal because a majority of people in Africa without electricity were in the rural areas. Just transition, therefore, was about equity, socio-economic inclusivity, and competitive economic growth, he said.
“We talk about energy transition and about gas for export, we cannot be talking about gas for export but gas for addressing Africa’s challenges, '' he argued, emphasizing that the narrative of energy transition should change and youths should be included in the African narrative on energy transition.
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