Picture: ANA Files. – A wind farm in South Africa. To meet SDG 7 goals, Africa needs to connect 90 million people annually to electricity in the next eight years and shift 130 million people from dirty cooking fuels every year. Africa’s energy transition is a huge task and will cost an estimated $100 billion annually between 2020 and 2040.
By Akinwumi A Adesina
I am honoured and delighted to speak with you at the Berlin Energy Transition Dialogue.
I wish to take this opportunity to thank the Government of Germany for its strong support for the African Development Bank Group, especially on the Bank’s 7th general capital increase and major contribution towards the 16th replenishment of the African Development Fund, as well as support for our work on renewable energy. I also commend the Federal Ministry for Economic Affairs and Development on its new Africa Strategy.
Ladies and gentlemen,
As we discuss energy transition, as it relates to Africa, let me state from the onset that Africa is completely energy poor. The Continent accounts for only 6 percent of global energy use and just 3 percent of global electricity demand.
But Africa has made important progress in terms of access to electricity, with population increasing from 44 percent to 56 percent between 2010 and 2020. Despite the progress, close to 600 million people do not have access to electricity, and about a billion Africans lack access to clean cooking energy.
To meet SDG 7 goals, Africa needs to connect 90 million people annually to electricity in the next eight years and shift 130 million people from dirty cooking fuels every year. Africa’s energy transition is a huge task and will cost an estimated $100 billion annually between 2020 and 2040.
Universal access to electricity is possible in Africa, if the Continent harnesses its massive potential in renewable energy sources. The declining costs of solar and wind energy technologies, coupled with more affordable energy storage systems make renewables cost-competitive and present a unique opportunity for Africa to underpin its future energy needs based on renewables.
The African Development Bank is spearheading efforts to unlock Africa’s vast renewable energy potential. The Bank no longer funds coal energy projects.
Since 2016, 86 percent of our investments in power generation are in renewables, including transformative projects such as the 510 megawatts Noor Ouarzazate solar project in Morocco, which is the world’s largest concentrated power plant and the 310 megawatts Lake Turkana wind project in Kenya, which is sub-Saharan Africa’s largest wind farm.
The Bank’s $20 billion Desert to Power project is developing 10,000 megawatts of solar power across eleven countries in the Sahel and East Africa, that will provide renewable energy via solar for 250 million people. When completed it will become the largest solar zone in the world. Projects are already being implemented in Chad, Mali, Burkina Faso, Mauritania, Eritrea, and Niger.
Through the Bank’s Sustainable Energy Fund for Africa (SEFA) we are investing in Green Baseload power, as well as mini-grids and decentralised off-grid energy systems. I wish to thank the Government of Germany for its very strong support to SEFA programme. The Bank is supporting the Just Energy Transition in South Africa (which currently relies on coal for 80 percent of its energy supply) and is currently in discussions with Senegal as part of the Just Energy Transition Partnerships initiated by the G7.
Ladies and gentlemen,
While we must and will do all possible to expand the use of renewable energy, especially given Africa’s enormous potential for solar, hydro, wind and geothermal energy sources, the intermittency of new renewable energy sources (wind and solar) makes it currently impossible to guarantee security of supply.
Natural gas is therefore a key part of the energy mix for assuring security of supply and is a critical transition fuel for Africa. Transitioning from coal to gas generation will reduce emissions in Africa by about 40 percent. Estimates also show that if sub-Sahara Africa (excluding South Africa) were to triple all its electricity consumption overnight using only natural gas, the additional carbon dioxide would only constitute 0.6 percent to global emissions. Similarly, shifting from fuelwood, charcoal, and kerosene for cooking to the use of liquified petroleum gas will lower emissions, while saving forests, biodiversity loss, and millions of lives, especially of women and children.
Also, Africa’s natural gas reserves have become a new major supplier of gas to Germany and the rest of Europe, especially as they deal with the aftermath of the Russian war in Ukraine on gas supplies from Russia. We have a saying in my native language (Yoruba) that “the eye that cries must see at the same time”. So, as we think of energy transition we should think of it holistically, given due attention to the “just part”, given that Africa has only contributed less than 3 percent to historical global greenhouse gas emissions.
Ladies and gentlemen,
Africa is very well positioned to help lead the revolution on clean energy industrial value chains because it accounts for 80 percent of the world’s platinum reserves, 50 percent of cobalt reserves and 40 percent of manganese reserves and huge resources for graphite and lithium. Africa is therefore a crucial source for minerals and metals for clean energy value chains, including electric vehicles and utility-scale battery storage. And we shouldn’t just export – we should manufacture. Africa is the perfect place to build lithium-ion batteries to power German cars.
We must also unlock Africa’s potential for green hydrogen, estimated at $1 trillion. Some African countries have already started developing green hydrogen projects. To spur this development, as well as drive the growth of green infrastructure in Africa, the African Development Bank, Africa50 and the African Union have launched the Alliance for Green Infrastructure in Africa (AGIA). AGIA targets to raise $10 billion to accelerate Africa’s just and equitable transition to net zero emissions. I look forward to Germany’s support for AGIA.
Finally, the Bank is investing in clean cooking technologies that lower emissions. Our investment in the SPARK + Africa Fund supports development and distribution of clean cooking energy solutions, including biomass stoves, advanced biomass fuels, liquified petroleum gas (LPG), ethanol and biogas systems. It will deliver clean cooking solutions for about 2 million households and reduce around 16 million tons of CO2 equivalent of carbon emissions.
Ladies and gentlemen,
We all have a collective responsibility to do our part in limiting global warming to 1.5 degrees Celsius. What Africa needs is a lot more financing to support its drive to universal access to energy.
Global dialogues on Africa’s energy transition must be pragmatic and not ideological.
While Africa must accelerate the development of its massive renewable energy sources, Africa must also be given time to transition and (be) allowed to use its natural gas as transition fuel, just like it is the case in Germany, as well as Europe. What is acceptable for Germany and Europe must be acceptable for Africa.
There must be equity, justice, and fairness on energy transition.
Thank you very much.
Vielen Dank!
Dr Akinwumi A Adesina is President of the African Development Bank Group
* Speech delivered at the Berlin Energy Transition Dialogue