Business Times Africa Magazine 2017 /vol 9/ No2 BT2Edition2017_web | Page 23

POWERING AFRICA'S TRANSFORMATION
CARLOS LOPES
former Executive Secretary of the United Nations
Economic Commission for Africa, is a Professor at the
University of Cape Town and a visiting fellow at the
Oxford Martin School, University of Oxford.
than 600 million people there do not
have access to electricity, and current
demand is relatively modest.
To avoid the harmful spillover
effects of high-carbon economic
growth, Africa will have to undergo
a “climate smart” energy revolution.
African countries will need to build
climate-resilient infrastructure and
tap into the continent’s abundant re-
newable-energy resources. Doing so
will broaden access to energy, create
green jobs, reduce environmental
pollution, and enhance energy secu-
rity by diversifying sources.
At the same time, Africa’s energy
revolution will itself be challenged
by some of the worst effects of cli-
mate change. For example, as rainfall
becomes more erratic, hydropower
production and revenues may de-
cline. This risk can be managed by
modifying existing investment plans
to account for large climate swings.
Still, for the region to adapt, the Unit-
ed Nations Environment Programme
estimates that it will need annual in-
vestments of about $7-15 billion by
2020, and $50 billion by 2050.
Rather than treating new cli-
mate-related risks as hurdles to
overcome, we should view them as
opportunities for investment and
innovation. We are standing on the
threshold of an exciting new era in
which technological progress allows
us to use a range of conventional and
unconventional energy options (ex-
cluding nuclear energy).
ALIKO DANGOTE
Founder and Chief Executive of the Dangote Group and
Chairman of the Dangote Foundation, is the Co-Founder
of the African Energy Leaders Group. TONY ELUMELU
Chairman of Heirs Holdings and United Bank
for Africa (UBA), founder of the Tony Elumelu
Foundation, and Co-Founder of the African Energy
Leaders Group.
African countries can now com-
bine energy sources to adapt to reali-
ties on the ground. Unlike in past dec-
ades, they no longer need be tied to
a single energy source. And, because
much of Africa’s energy infrastruc-
ture remains to be built, governments
have a chance to get their energy and
infrastructure policies right the first
time, thereby maximizing returns on
investment.
Policymakers should take a few key
steps to help transform Africa’s ener-
gy sector and boost long-term eco-
nomic growth. For starters, making
it easier, safer, and more financially
attractive for private investors to enter
power markets would boost compe-
tition, thereby spurring innovation
and lowering costs. Moreover, African
countries should seek opportunities
to share infrastructure and create
cross-border power pools.
Another important step is to in-
vest in renewable energy. Africa has
an exceptionally rich portfolio of
clean-energy assets, including almost
nine terawatts of solar capacity, more
than 350 gigawatts of hydropower
capacity, and more than 100 GW of
wind-power potential. This is more
than enough to meet the continent’s
future demand.
At the same time, renewable-ener-
gy sources are becoming less expen-
sive, making them increasingly com-
petitive with fossil-fuel alternatives.
For example, the price of utility-scale
photovoltaic solar energy in Africa fell by 50% between 2010 and 2014,
and continues to decrease today. And
South Africa’s Renewable Energy In-
dependent Power Producer Procure-
ment Programme has seen an overall
decline in bid prices and oversub-
scription rates.
Innovative off-grid and mini-grid
electricity-distribution
systems,
meanwhile, are already transforming
Africa’s energy landscape and multi-
plying the ways to exploit clean-en-
ergy sources and expand electricity
access for the poor, particularly in ar-
eas where consumers are widely dis-
persed. Companies such as M-kopa
and Mobisol have made small so-
lar-energy systems available to thou-
sands of African homes, by allowing
their customers to pay in installments
on their mobile devices.
Still, to accelerate a market shift on
the scale that Africa needs will require
increased financing from export
credit agencies, development banks,
commercial financial institutions,
and other cross-border sources.
Africa has a chance to bring hun-
dreds of millions of people without
electricity into the modern econo-
my; and we have an opportunity to
pioneer the next investment fron-
tier. Getting Africa’s energy transfor-
mation right, by pursuing a mix of
policies and investments that boost
diversity and strengthen resilience,
will ensure a brighter future for us all.
– Project Syndicate
2017 | Business Times Africa 21