Powering the African continent

Insights and Analysis

Powering the African continent

21 December 2021

Transition to clean energy for African countries is a significant challenge, but one that has to be met in a continent vulnerable to the effects of climate change. Hundreds of millions of Africans do not have access to power (clean or otherwise), transition is costly and any transition must ensure communities, such as those involved in the fossil fuel industries, are not left behind.

Transition to clean energy for African countries is a significant challenge, but one that has to be met in a continent vulnerable to the effects of climate change. Hundreds of millions of Africans do not have access to power (clean or otherwise)1, transition is costly and any transition must ensure communities, such as those involved in the fossil fuel industries, are not left behind.

At COP 26, African leaders urged those of developed nations to meet their COP 15 pledges to fund the reduction of greenhouse gas emissions and adaptation to climate change in developing countries². At that event in Copenhagen in 2009, developed countries promised to mobilise long-term finance of US$100 billion a year by 2020.

But a report³ released during COP 26 found that while climate finance provided by developed countries has been increasing to reach US$79.6 billion annually in 2019, it is unlikely the US$100 billion figure had been met for 2020 (full data will not be available until 2022). The majority of the funds stemmed from public finance, while private finance mobilisation underperformed against expectations.

Public finance is drawn on in a joint UK, US, France, Germany and European Union effort to fund a just transition in South Africa, announced during COP 26. Around US$8.5 billion has been earmarked over the next three to five years and will be made available via a range of financial instruments.

The idea is to help accelerate the decarbonisation of South Africa’s electricity system while protecting vulnerable workers and communities, especially coal miners, women and youth, affected by the move away from coal. Coal-fired power stations will be decommissioned or repurposed and investment in low-emission energy such as renewables will be pursued as will a shift to the production of electric vehicles.

According to the International Energy Agency, the population of Africa’s cities is expected to expand by 600 million over the next 20 years – a higher increase than experienced in China’s cities during its economic boom. This will be accompanied by economic growth, infrastructure development and, of course, energy demand, which is projected by the IEA to rise by 60 percent.

Africa has a chance to leapfrog developed nations as renewable energy technologies become more affordable. The African Development Bank’s (ADB’s) New Deal on Energy for Africa is focused on providing universal energy access, giving priority to low-carbon technologies such as hydro, solar, geothermal and wind power.

To enable access, the project is supporting grid reinforcement and extension, constructing transmission lines and regional interconnections. Decentralised energy access for more remote communities is also being pursued, with ‘off grid’ solutions such as solar home systems and mini grids. In Mozambique, the government has recently permitted off-grid plants of up to 10MW in mini-grid zones to attract private sector investment as part of an initiative to increase rural electrification. The country has low rates of electrification, with the overall official access rate at 40 percent, which falls to just 8 percent in rural areas.

Africa’s successful transition to renewable energy requires much greater investment in grid infrastructure across the continent.

Universal access to power is key to economic growth and the alleviation of poverty across the African continent. Until now, Africa has contributed little to global greenhouse gas emissions; it is incumbent on the international community to ensure that this growth will not be fuelled by fossil fuels. Accelerating Africa’s growth and clean energy transition while advancing universal electricity access to tackle poverty is key.

Underlining the firm’s focus on energy and infrastructure projects, Hogan Lovells has announced a change in leadership of its Africa practice. Effective 1 January 2022, partners Olivier Fille-Lambie (Paris) and Arun Velusami (London) will co-lead the global practice. Read more.