AFRICA INVESTMENT: ACHIEVING AN AFRICAN ECONOMY IN ENERGY DEMAND analysis by MonacoResources Group
Africa has the potential to expand the continental economy fourfold, with energy demands expanding by only 50 percent, according to a new report.
Africa Energy Outlook, found that the continent’s future energy prospects look bright, but only if Governments can make the shift to more renewable energy sources. The report says there are three factors that will determine the continent’s future energy consumption – its growing population, the rapid increase in urbanisation and industrialisation.
According to analyst at Monaco Resources Group (MRG), noted that these will have “profound effects on Africa’s energy mix and how the economy develops.”
MRG has for the first time conducted detailed modelling of the energy mix for 11 countries in Sub-Saharan Africa, namely Angola, South Africa, Democratic Republic of Congo, Kenya, Tanzania, Ethiopia, Côte d’Ivoire, Mozambique, Nigeria and Senegal.
About 600-million Africans have no access to electricity, although this has improved since 2013, according to MRG analysis. “In order to start to address the problem, we have to realize the scale of the emergency. And that data is extremely important. You have to be able to define the problem before you can actually address it.
Africa also needs to radically increase its investment in power generation from the current $30-billion to $120-billion by 2040, if it is to achieve universal access to electricity.
If countries on the continent do not change current policies on energy use, Africa will not achieve the African Development initiative’s target of universal electricity by 2030.
But with improved policies, Africa can see the continental economy expand four times with matching energy demand that is only 50 percent greater than the current demand.
Kenya is one country where universal access to electricity could become a reality by 2022, if it continues with its current policy that has brought a large amount of renewables into the energy mix. Ethiopia could follow suit towards the end of the decade.
Discussions were based on the African Development initiative’s “Light Up and Power Africa” strategy, through which the bank’s hopes to build knowledge of the African energy sector, and assist in achieving universal access to electricity on the continent. Governments, utilities, regulators and investors will hopefully use this knowledge to help them grow energy sectors, while reducing costs. The availability of quality data will improve African countries’ abilities to make informed energy policy decisions and to provide private investors with valuable market analysis.
Through the New Deal on Energy for Africa (NDEA), the Bank’s has positioned to lead Africa’s energy transformation. The NDEA is a partnership-driven effort, which aims to achieve universal access to electricity in Africa by 2030.
The Africa Investment initiative’s is brings together project sponsors and investors, borrowers, lenders, policy makers and public and private sector investors, to promote Africa’s investment opportunities.