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Africa has a more difficult energy transition challenge than most other regions in the world. No other continent is tasked with improving electricity access to the same extent, while simultaneously being told that decarbonisation must be prioritised.
And while billions of dollars have been promised to support the energy transition, how are we seeing these funds materialise and be used?
Improving electricity access requires massive investment in transmission capacity alone, to interconnect countries and stabilize grid networks across the continent.
Africa has an abundance of resources: we have 40% of the world’s solar energy generation potential for example but contribute only 1% of global production. But many areas suitable for renewable electricity generation are located far from major offtake centres and industrial energy consumers. So, the potential of these vast renewable resources cannot be fully harnessed without the development of adequate long-distance transmission infrastructure.
To fund Africa’s energy transition, we need new thinking around the application of innovative instruments such as blended finance mechanisms to help catalyse additional pockets of international capital for this market. As government balance sheets continue to be buffeted by macroeconomic tailwinds, private capital from a range of sources (both local and international) must and will play a key role.
