The renewable energy imperative for Africa

Dear ALER members and friends,
 

I am honoured by ALER’s invitation and this opportunity to underscore the imperative of renewable energy in Africa’s economic transformation, and the role of the African Development Bank (AfDB) as a trusted partner in the continent’s transition to a low-carbon energy future.
 

Lack of energy is the most critical challenge facing Africa today. It is estimated that in Sub-Saharan Africa over two-thirds of people - more than 600 million - do not have access to electricity. Where energy is available in the region, supply is often expensive and unreliable, with electricity outages occurring on average 91 days per year and costing the region more than 2% of GDP. Yet, the true value of modern energy for each African is certainly much higher, and comes in the form of improved education, better health care, higher productivity and incomes, more job opportunities and gender empowerment. Energy for all is thus an imperative to unlock the full economic potential of the continent.
 

Paradoxically, Africa is endowed with abundant renewable energy resources that go far beyond its needs. This potential is exploitable using currently proven technologies and available know-how in developing solar, wind, hydro, geothermal, and biomass energy sources. In addition, the prices of certain renewable technologies have fallen dramatically in recent years and are increasingly competitive with conventional types, and in fact cheaper in areas that are distant from the national grid. This convergence offers a unique opportunity for lighting and powering Africa while transitioning to a low carbon and greener future.
 

The AfDB, as the premier development finance institution in in the continent, is playing a lead role in this transition. It has channeled around $ 7 billion for clean energy projects since 2007, it is an implementing agency for global funding initiatives such as as the Scaling-up Renewable Energy Programme and Clean Technology Fund; it is the home of the Sustainable Energy Fund for Africa (SEFA); it host the secretariats for the Sustainable Energy for All (SE4All) Africa Hub and the Africa Energy Leaders Group.
 

Still much work remains to be done and this is why AfDB is raising its level of ambition. Immediately after taking office on September 1st2015, AfDBs’ President Adesina announced his landmark New Deal on Energy for Africa initiative, to catalyze the $55 billion needed to close the financing gap in the energy sector in sub-Saharan Africa. Under the New Deal, the Bank, its partners and client countries will commit to closer cooperation, increased financing and deeper reforms in the energy sector. Renewable energy investments will take a central role and offer the best path to electrification of isolated or underserved communities across the continent.
 

AfDB is already actively engaged in Lusophone African countries and positioned as a strategic partner in clean energy. For example, through SEFA the Bank is supporting: the implementation of the new feed-in-tariff law in Mozambique to unlock private investments in on-grid and mini-grid renewables; an innovative wave energy for water desalination project in Cape Verde, to address the country’s water shortage while reducing fossil fuel imports;  and Guinea-Bissau’s long-standing ambition to implement a transformative hydro power project (Saltinho), of key importance for meeting its energy needs as well as exporting power to the sub-region.
 

We thus welcome and commend ALER’s work as a catalyst of cooperation to accelerate the much needed investments in renewable energy infrastructure in Lusophone African countries.

Joao Sarmento Cunha

(Chief Climate Finance Officer / Renewable Energy Funds Coordinator at African Development Bank)