The World Economic Forum (WEF), in a new whitepaper, highlighted the urgent need for existing and future funding and financing to target cleaner energy solutions.
The whitepaper, written in collaboration with Deloitte, outlines the key considerations in setting the course for Africa’s energy future, was released at the 2021 Sustainable Development Impact Summit. Entitle Financing the Future of Energy, the report outlines Africa’s electricity landscape and financing options in context with the global drive to reduce carbon emissions.
Africa’s power sector will play a central role in the transition from fossil fuel-driven power generation to a renewable-strong energy mix. According to the whitepaper, the migration to a multi-stakeholder-oriented net-zero power grid is being driven by “the 3Ds”:
- Decarbonisation: moving from fossil fuel sources to renewables
- Decentralisation: Shifting from centrally managed generation, transmission and distribution to decentralised systems
- Digitalisation: Leveraging digital technology to advance the transition
The report contends that new coalitions and investments with developed nations and NGOs, including WEF, must coordinate and enable countries to leapfrog existing technologies and infrastructure.
“The need for digitally smarter utility platforms and sustainable development programmes will guide global leaders in helping to shape equitable and inclusive recovery programmes,” said Chido Munyati, Head of Africa at the World Economic Forum.
“The entire continent remains vulnerable, but this whitepaper offers a view on what are viable financing options that exist today for clean energy sustainability and equitable recovery for all of Africa,” said Munyati.
According to Mario Fernandes, director for Africa power utilities and renewables at Deloitte, funding will be the biggest hurdle to ensuring Africa’s sustainable transition to renewables at scale. “There are many financing solutions available. Africa’s winners will be the ones that are able to leverage what exists while creating an enabling environment for the private sector through a renewable energy investment facility.”
Case studies in China and India show that financing solutions for a clean energy transition often involve long cycles. Economic booms in these countries resulted in a significant shift in carbon emissions. Since similar economic booms are expected across Africa, the report highlights how crucial it is to anchor growth in technologies that can enable lower emissions.
While Africa’s contribution to greenhouse gas emissions from fossil fuels significantly lags behind those of other continents, it still carries a huge potential to accelerate the transition to a net-zero future.
Currently, half of the continent lives without adequate access to electricity. As energy demands increase, the energy gap could be bridged through clean energy alternatives, if the financing solutions are employed now.
Read the full report