Renewable Energy

Africa needs $25 billion per year for universal access to clean energy: IEA

As much as $22 billion per year is needed for electricity connections alone

By Madhumita Paul
Published: Thursday 13 October 2022

Achieving full access to modern energy in Africa by 2030 will require investing $25 billion per year, according to a new report.

The required amount is around a quarter of the current total energy investment in the continent, according to the International Energy Association (IEA) report presented at a conference in Kampala, Uganda October 7, 2022.

Energy consumption in the Greater Horn of Africa — defined in the report as Djibouti, Eritrea, Ethiopia, Kenya, Somalia, South Sudan, Sudan and Uganda has grown by 3 per cent per year over the last decade. 

These eight countries constitute the members of the Intergovernmental Authority on Development, one of Africa’s regional economic communities.

About 40 per cent of the population in sub-Saharan Africa lives in the Greater Horn of Africa. In 2020, half of them or 150 million people were without access to electricity.

The COVID-19 pandemic pushed more than 20 African countries into debt distress and reversed progress on expanding access to electricity. 

Energy infrastructure in the Greater Horn of Africa has struggled to keep pace with a fast-growing population, according to the report titled Clean energy transitions in the Greater Horn of Africa

Stronger deployment of energy efficiency and renewable technologies is needed to overcome this hurdle, the authors of the report mentioned. 

As much as $22 billion per year is needed for electricity connections alone as capital spending on grids (mainly distribution networks), generating plants and off-grid solutions, they noted.

Clean cooking requires just under $3 billion per year of investment in clean cook-stoves and other end-use equipment. 

Current investment falls far short of these levels: In 2019, it amounted to just 13 per cent of the average requirement for 2022-2030 in the case of electricity and 6 per cent for clean cooking, said the report.

In 2019, over $3 billion was spent on access to electricity and clean cooking.

The report stated:

Inefficient bureaucracy, a lack of clear energy sector planning and limited technical expertise all contribute to significant cross-cutting risks for investors, although the severity of these risks varies drastically across regions. 

Attracting more energy investment requires better leveraging of limited sources of concessional public financing to attract more private capital, the analysts observed.

Attracting private capital is crucial to reaching these investment levels, particularly to harness all available sources of financing and to switch from relying heavily on public sources, they added.

“Governments therefore need to maximise the catalytic potential of public finance, while not crowding out private capital,” the report read.

New sources of finance specific to clean energy, such as climate finance, carbon credits, renewable energy certificates and sustainable or diaspora bonds, can help. 

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