Funding for African energy projects needs scaling up, fast

A topic that really loomed large at the African Energy Week 2024 conference is the need to scale up investment in African energy, highlighted International Energy Agency (IEA) deputy executive director Mary Burce Warlick, in her address to the conference, at the Cape Town International Convention Centre, on Tuesday. Africa, she pointed out, contains 20% of the world’s population but is the site of only 4% of global energy investment.

Indeed, over the past ten years, investment in the African energy sector had been falling. “It’s way below what the continent needs,” she stressed. Lowering the cost of capital for investments in African energy projects was “critical”.

The continent was still far from achieving universal energy access. Forty per cent of Africans still lacked access to electricity. Seventy per cent lacked access to clean energy, particularly for cooking. Lack of access to clean cooking cost lives, particularly of women and children. Additional efforts were needed on the funding front, including concessional financing.

The second issue she highlighted was the development of energy, particularly green energy, for the industrialisation of Africa. This was a key theme for the IEA.

In this regard, natural gas was important for Africa. Natural gas production in Africa had to increase, both to meet the energy needs of African countries and to reduce their greenhouse-gas (GHG) emissions. African use of natural gas for energy would have, she pointed out, a tiny impact on global GHG emissions.

But Africa must not neglect its other energy resources, she cautioned, These included hydropower, geothermal power, wind and solar power.

It was crucial that all the relevant stakeholders came together to scale up investment in the African energy sector. The IEA was, she assured, committed to supporting all such initiatives.

The IEA is an intergovernmental agency, composed of 31 member States, 13 associated States, and with, currently, five candidate States. Member States must be members of the Organisation for Economic Cooperation and Development (OECD). Associated States did not need to be OECD members. The African countries which are associated States of the IEA are Egypt, Kenya, Morocco, Senegal and South Africa.