Tackling Energy Poverty in Africa
What it takes to eliminate energy poverty in the continent
Overview
Energy poverty is among the key global challenges despite the advancements in modern energy. In developing countries, particularly Africa, the levels of energy poverty is alarming. The African Development Bank Group (ADBG) established that over 40% of the Sub-Saharan Africa population lack access to electricity corresponding to 640 million people. Limited access to clean energy in Africa persists despite the existence of sufficient energy resources to meet the domestic demands. Majority of rural Africans rely on direct fuel combustion from wood sources such as wood and charcoal fuel characterized by three-stone fires and kerosene/paraffin stoves. The mismatch in demand and supply of energy is entrenched by the very low socioeconomic base of African economies and systemic capacity gaps.
Why addressing energy poverty is important
Air pollution is perhaps the biggest threat posed by Africa’s over-reliance on unsafe energy sources. The dangers of insufficient energy access manifest itself in the hundreds of thousands of deaths from household pollution. Children are uniquely vulnerable to household pollution because of their physiological disposition and level of exposure. UNICEF (2017) reports “Respiratory tract infections caused by air pollution resulted in over half a million deaths of children under five in 2016.”
Access to clean energy is crucial to ensure the attainment of basic human needs such as health and education. Air pollution is not only silently suffocating Africa but also deeming children’s ability to reach their full human potential. Children are continually sick thus unable to pursue their education and meet other development needs. Moreover, the effect of the pollution on their lungs impedes their growth and development since their respiratory cells are more permeable.
The deaths from household pollution in Africa have increased by 60% from 1990 to 2017 from 164,000 to 258,000. The ongoing population growth and industrialization threatens to increase the levels of pollution in the continent.
The long and short of tackling energy poverty in Africa? It’s time to turn around the narrative and accelerate socioeconomic transformation to unlock both human and business potential.
What it takes: Energy Investment Opportunities in Africa
The stage is set for economic transition and investment in sustainable energy sources to accelerate socioeconomic progress in the continent. The popular approaches to addressing the challenges include investing in reliable, modern, affordable and sustainable energy.
The emergence of Africa as a major player in the global energy industry and a key exporter of natural gas creates opportunities for the production of liquefied petroleum gas (LPG) which will potentially increase clean cooking. The African Report 2019 highlighted that Africa could provide 20% of the global natural gas needs by 2025 supplied by its over 200 trillion cubic feet (Tcf) of natural gas reserves in Mozambique, Tanzania, Senegal and Mauritania. Other African countries are adopting the use of Floating Liquefaction Plants to expand production capacities.
The renewable energy sector is also primed for growth. Clean energy initiatives have gained traction in the continent with a great focus on reducing greenhouse gas emissions. The continent is endowed with sufficient wind, solar and hydro-power resources that could help bridge the existing production capacity gaps. This presents a lucrative entry point for clean energy investment initiatives and other climate change products and services to resolve the air pollution challenges in the continent. It is a propitious moment for investors to introduce clean Energy technologies/solutions in the form of Improved Cook Stoves (ICS), which allow biomass (wood fuels, charcoal, etc.) alongside other sustainable renewable energy initiatives. Goldman Sachs projects that the transition to sustainable clean energy will create approximately $16 Trillion investment opportunity through 2030 while expanding electricity grids will attract approximately $120 Billion a year through 2040.
Recommendation
To tap into the energy investment opportunities in Africa, investors must focus on economically inclusive models that will increase the intrinsic resilience of Africa’s natural resources, alleviate the critical challenges to ecosystems and resolve clean energy access inequities in the continent. There is a great support for investment in energy enabled by a friendly Energy Policy environment in most African countries and collective state initiatives like the “Agenda 2063” of AU that provides for faster economic expansion accompanied by the full achievement of access to electricity and clean cooking, in line with Sustainable Development Goal 7.