At a press conference at the fifteenth session of the International Renewable Energy Agency (IRENA) Assembly in Abu Dhabi, Kandeh Yumkella, Chairman Presidential Initiative on Climate Change, Renewable Energy and Food Security, Sierra Leone said Africa has huge energy potential and the Accelerated Partnership for Renewables in Africa (APRA) can help finance this.
APRA was launched at the 2023 United Nations Climate Change Conference or Conference of the Parties 28 (COP28) held in Dubai, United Arab Emirates (UAE) by African countries and international partners and is designed to help realise Africa’s vision for sustainable socio-economic development and provide access to funding.
At present APRA members are Ethiopia, Ghana, Kenya, Namibia, Rwanda, Sierra Leone and Zimbabwe.
Africa received less than 2% of the global investment in renewable energy projects in 2024, but APRA would help to increase this share as it would mitigate risk by partnering with multilateral development finance institutions (DFI), as well as countries such as Denmark, Germany, the UAE and the US.
“In African countries, projects are ready, the regulatory environment has improved, but investors are still asking for guarantees, so that is why we are partnering with the DFIs,” Yumkella said.
When asked by Business Report whether APRA had engaged with the World Bank’s Multilateral Investment Guarantee Agency (MIGA), Seth Agbeve Mahu, the director of Renewable Energy at the Ghanaian Ministry of Energy, said that APRA had ongoing discussions with MIGA and he hoped that would lead to a $450 million (R8.6 billion) guarantee facility later this year.
Yumkella emphasised that renewable energy projects had to be economically viable to be sustainable and these projects could not rely on hand outs as energy provision was a business not a charity.
“We are concerned about debt, which is why we have to prioritise projects that provide win-win solutions for the private sector investors and the state-owned power utilities. We are agnostic when it comes to energy technology and aim to have energy that is affordable, reliable and accessible, so we aim to have energy costs near US 3 cents per kilowatt hour (kWh) rather than the 11 US cents per kWh that seems to be the current norm for African renewable energy projects,” he said.
Mahu said while the focus was on renewable energy projects, one should not neglect strengthening the transmission grid, in particular cross-border power pools as countries such as the Democratic Republic of the Congo (DRC) and Sierra Leone had enormous hydropower potential, while others such as Ghana and Nigeria had large natural gas reserves.
“We should put inter-connectedness on the front burner to create a continental grid so that we can share resources for the common benefit,” he said.
Tom Alweendo, Ministry of Mines and Energy, Namibia said that energy transition was not a choice, but a must, and African countries could learn a lot from other countries and did not need to re-invent the wheel.
“We need to look at our own national priorities, while at the same time increase investor confidence. Blended finance can help bridge the finance gap, so IRENA provides a platform for high level dialogue on these issues,” he said.
The Nairobi Declaration in 2023 set the ambitious target of increasing Africa’s renewable energy capacity from 56 Gigawatts (GW) in 2022 to at least 300 GW by 2030, which exceeds the IRENA target of tripling renewable energy capacity by 2030.
The aim is to provide clean energy access to at least 300 million Africans in the next five years, half of which would have to be serviced by mini-grids.
BUSINESS REPORT