Energy projects should improve value chains

by MMC
0 comment

A session of the Africa Investment Forum in Marrakech in November on the energy sector highlighted the need for clean, affordable energy for the continent’s growth and well-being. Given the existing deficits in electricity access, forum participants urged investors and political leaders to take immediate steps to bridge this gap.

They also highlighted how the lack of energy was hampering Africa’s ability to unlock its full potential, saying energy infrastructure was essential to building industries, creating jobs and promoting trade and regional integration.

The forum also discussed the opportunities and challenges of Africa’s energy transition, which requires substantial investments in renewable energy.

Africa’s enormous potential

Africa has enormous potential to harness renewable energy sources such as solar, wind, hydropower, geothermal and bioenergy. However, there are many obstacles and barriers to overcome before this potential can be harnessed.

For Africa to successfully transition to renewable energy, countries must attract international capital by reducing risks and encouraging private investment.

Alain Ebobissé, CEO of development finance organization Africa50, said Africa’s energy transition will require huge investments and that international investments can play a key role in supporting the energy transition by “reducing risks and by providing incentives for the development of renewable energy.”

The importance of strengthening and modernizing the African network was underlined by several speakers at the AIF. They highlighted that Africa’s current electricity distribution infrastructure is insufficient, inefficient and unreliable, hampering the integration of various renewable energy sources such as solar and wind.

To accommodate more renewable energy, the grid must be modernized and expanded, with improved transmission and distribution networks, smart grid technologies and regional interconnections.

Financing energy projects was also an important topic, given the huge unmet demand for new investments in the African energy sector.

Breaking down barriers to energy investment

Amadou Hott, Special Envoy of the President of the African Development Bank for the Africa Green Infrastructure Alliance, highlighted the need for Africa to proactively remove barriers to investment in the energy sector .

One of the challenges, according to the economist and investment banker, is the lack of adequate project preparation. This creates a challenge for investors looking for bankable projects. Hott highlighted the Alliance’s success in unlocking $100 million in grants for the private sector to improve infrastructure project readiness. He added that the Alliance had also mobilized $400 million in blended finance to co-invest with the private sector.

Africa also has a role to play in financing its own infrastructure. Hott stressed the importance of increasing domestic resource mobilization, saying a strong public financing environment is essential for the private sector to invest with confidence and at scale.

He said many African countries had a low tax-to-GDP ratio and simply addressing this problem would increase revenue generation.

Boitumelo Mosako, CEO of the Development Bank of South Africa, argued that development finance institutions should not only focus on building new climate-resilient infrastructure, but also on maintaining infrastructure existing ones and make them more adaptive to climate change. She gave the example of hydroelectric plants, which can be upgraded with new technologies to make them adaptive to climate change.

She echoed the views of several experts and leaders, saying Africa should prioritize energy projects that can have a direct positive impact on local value chains. “We need to think about what these investments mean for the communities where these projects will be implemented from a job creation perspective and also from an industrialization perspective. »

You may also like

Leave a Comment

The news website dedicated to showcasing Africa news is a valuable platform that offers a diverse and comprehensive look into the continent’s latest developments. Covering everything from politics and economics to culture and wildlife conservation

u00a92022 All Right Reserved. Designed and Developed by PenciDesign