Annual investment of $25 billion would deliver universal energy access in Africa by the end of decade, according to the International Energy Agency, Fatih Birol, executive director of the Paris-based energy body, said in an interview with Financial Times, Report informs.
He noted that after a decade of improvement, access to electricity in Africa had fallen by 4 percent between 2019 and 2021, adding that development banks needed to take “urgent action” to increase flows to Africa’s renewable energy sector.
Slowing economic growth, supply chain disruptions and rising fuel prices due to a series of overlapping crises had hurt Africa’s energy system, contributing to a sharp increase in extreme poverty, Birol said in an interview. “This year I expect the same negative trend may continue.”
Speaking ahead of the release of the IEA’s African Energy Outlook 2022, Birol said only about 7 percent of the total climate finance flows from advanced economies to developing countries goes to African nations. “In my view, the biggest barrier in front of African economic development is lack of energy access,” he said.
About 600 million people in Africa, or 43 percent of the population, lack access to electricity. Universal energy access could be achieved by 2030 through investment of $25 billion a year, equivalent to about 1 percent of total global energy investment, according to the IEA study published on June 20.
Renewables, including solar, wind, hydroelectric and geothermal power, could provide 80 percent of the new generating capacity required by 2030, the study said. Africa is home to 60 percent of the best solar resources globally but has only 1 percent of installed solar energy capacity.
While the investment required is relatively small in global terms, international competition for funding for energy projects means Africa faces an uphill battle to attract a significant increase in financing. “The continent’s energy future requires stronger efforts on the ground that are backed by global support,” Birol said.
Despite the focus on renewable energy, Africa would also need to produce an additional 90 billion cubic meters a year of natural gas by 2030 in order to industrialize, the IEA study said. Increased supply of natural gas would be needed for producers of fertilizer, steel and cement as well as for water desalination.
Africa produces about 240 bcm of natural gas, largely in Egypt, Algeria and Nigeria. Around two-thirds is consumed on the continent, while the rest is exported via pipeline or as liquefied natural gas.