Staff Writer
Meeting Africa’s growing energy demand requires a significant increase in investment in clean energy projects, according to a new report by the International Energy Agency (IEA).
The report, Clean Energy Investment for Development in Africa, highlights the need to address financial barriers to unlock the necessary funding levels.
The IEA report emphasises that doubling down on clean energy investment is essential for Africa to achieve its development goals and ensure access to sustainable energy for its citizens. This aligns with the continent’s abundant resources for renewable energy sources like solar and hydropower.
It states that despite the continent’s immense energy resources, it currently attracts only around 3% of global spending on energy.
About 600 million Africans still lack 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 rising energy needs, as well as the energy access, climate and development goals set by governments in the region, requires annual energy investment to more than double to over $240 billion by 2030, with around three-quarters going to clean energy.
The report outlines key target areas for investment, including energy access, the power sector and emerging industries, such as critical minerals and the manufacturing of clean energy technologies.
It also highlights strategies to boost financing for energy investments in Africa, which remains difficult due to higher perceived risks and elevated borrowing costs compared with other parts of the world.
In emerging and developing economies, the cost of capital can be two to three times higher than in advanced economies.
The report emphasises that concessional finance is therefore key, especially to unleash more funding from the private sector.
Africa’s energy systems require, on average, $30 billion in concessional finance annually to 2030 to help realise the three-fold increase in private sector investment needed over the same period, according to the IEA analysis.
“The lack of energy access in Africa is a great injustice, but increased spending on impactful projects could quickly turn the tide,” IEA Executive Director Fatih Birol said.
The report said critical minerals and the manufacturing of clean energy technologies present practical opportunities to cultivate a growing industrial base.
Africa has vast mineral resources critical for clean energy technologies, and lithium mining is on the rise. Zimbabwe is leading the charge, with planned projects in Ethiopia, Mali, Namibia, the Democratic Republic of Congo, and Ghana.
This expansion has the potential to boost lithium production to 53-70 kilotonnes by 2030, but price volatility could cause delays.
