In the aftermath of COP27, a $10bn oil extraction project in Northern-Western Uganda is fanning the flames of environmental activism across the ... world. Rather than an opportunity for Uganda to accelerate its development, the project is described in apocalyptic terms by international NGOs and environmental activists.
The problem is not South Africa’s alone. Limited access to clean and reliable electricity afflicts hundreds of millions of people and businesses across the continent, and unfortunately, this number is growing by the day.
Since Covid-19 struck, 15 million people living in sub-Saharan Africa, who had recently gained access to basic electricity, can no longer afford it. Globally, four-in-five people without access to electricity now live in sub-Saharan Africa.
This energy poverty affects economic growth and fuels poverty and environmental destruction. It means that farmers must endure without access to irrigated water during droughts, mechanised agriculture for improved productivity, or even access to markets for their crops.
It means that forests are still being felled for use as household fuel. Degraded environments limit options for coping with climate change, whose impacts deepen poverty. It’s a vicious cycle. Climate change, poverty, and energy poverty are intertwined and demand solutions that address all three. Meanwhile, solar power in Africa represents just 1% of the global total.
The continent is looking to navigate an equitable and climate-friendly energy transition—from fossil fuel dependence to affordable, reliable, sustainable green energy—while keeping the lights on at home and businesses running. In Africa, meeting this challenge is particularly urgent. The continent’s economic future—and millions of lives—depend on it.
To ensure that every home and business has access to reliable, affordable, and clean energy by 2030, three things are needed: financing to bolster green energy development must grow exponentially; countries need comprehensive energy transition plans and clear, clean energy targets; and distributed renewable energy (DRE) should be utilized as a vital tool to reach underserved populations and strengthen the resilience of national grids.
Solar-powered DREs can be stand-alone solutions for homes and entire communities, or they can hook up to national grids, exchanging energy to fill gaps as they arise. This will serve remote unconnected areas and gradually break down silos between traditional utilities and sustainable mini-grid start-ups. Furthermore, they open dynamic opportunities for the growth of rural areas, particularly agribusinesses.
Keeping it local
These exciting, new developments are already underway in communities across Africa. Reliable, affordable energy allows entrepreneurs to process and package local grains, run carpentry and sewing businesses, and refrigerate produce or medicines. Locally available clean energy sources support jobs and income generation while also increasing demand for electricity, which lowers its cost.
This is the thinking behind an initiative in Uganda, where only 28% of the population has electricity through the central grid. The initiative aims to halve the $1,400 cost of grid connection by integrating centralised and decentralised technology. This initiative brings together Umeme Ltd, the centralised power utility company and several leading Uganda-based DREs to provide affordable, reliable, and clean energy in rural regions. In the project’s first phase, a mini-grid in Kiwumu has powered 300 households and 60 local businesses.
In Ethiopia and Burkina Faso, mini-grids are being used for solar-powered irrigation, potentially doubling the number of annual harvests for some crops. The job-creating potential of DREs is also impressive. A recent study found that investing in DRE systems creates 30 times more jobs than a comparable investment in fossil fuels.
But clean energy solutions, especially DREs, are woefully underfunded in Africa today. Africa accounts for just 4% of global power supply investment. Economists estimate that achieving reliable electricity for all would require an almost fourfold increase, to around $120 billion a year through 2040. This is prompting several countries, including Malawi, Sierra Leone, Nigeria, Ethiopia, and Uganda, to evaluate their policy and regulatory environments and develop comprehensive national energy plans.
At the same time, global philanthropy has a unique opportunity to make a difference, bringing catalytic capital to accelerate a more equitable transition to green energy. While global philanthropic giving to climate change mitigation represented less than 2% of total philanthropic giving in 2020.
COP26 ushered in a change
In November, The Rockefeller Foundation, IKEA Foundation, and the Bezos Earth Fund alongside leading development finance institutions, multilateral development banks, governments and private sector partners, launched The Global Energy Alliance for People and Planet.
The Alliance is stepping up to the challenge of financing an equitable energy transition through fossil fuel transitioning, grid-based renewables and DRE that will help avoid over 4 billion tons of greenhouse gas emissions and create 150 million new, green jobs.
Alongside fossil fuel transitioning and grid-based renewables, DRE will play a crucial role in expanding access to clean energy for Africa, where only 55% of the population has access to reliable energy, and climate change and Covid-19 are both battering economies.
Countries need comprehensive plans for a transition to renewable-based electrification that takes into account all available renewable energy resources; technical capacity and infrastructure; and a sober look at who is generating the power, who is getting it, and how it is being used.
Understand Africa's tomorrow... today
We believe that Africa is poorly represented, and badly under-estimated. Beyond the vast opportunity manifest in African markets, we highlight people who make a difference; leaders turning the tide, youth driving change, and an indefatigable business community. That is what we believe will change the continent, and that is what we report on. With hard-hitting investigations, innovative analysis and deep dives into countries and sectors, The Africa Report delivers the insight you need.View subscription options