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Africa Network

The Africa regional network currently spans from Algeria, Tunisia and Egypt in the North to Namibia and Kingdom of Eswatini in the South, including many Central African countries. While the continent is endowed with untapped human capital and significant conventional and renewable energy resources, an estimated 600 million people still lack access to electricity.

National Member Committees are interested in engaging in activities and events that provide opportunity to collaborate cross-border to establish dialogue, foster an exchange of impartial views and best practice, and identify common areas of research and action on issues such as energy access and affordability, energy efficiency, regional integration and interconnectivity, cross-border and trans-continental power transmission network, and tapping the entrepreneurial potential of grassroots innovation.

To facilitate these activities, the African regional network is developing working level relationships with African Union Commission (AUC), COMESA, ECOWAS, African Energy Commission (AFREC), and Association of Power Utilities of Africa (APUA).

Regional action priorities that support the Council’s mission and humanising energy vision are agreed on an annual basis by national Member Committees in the framework of a Regional Action Plan.

Each month, the African regional network meets to discuss matters of mutual interest, drive collective activities, and keep each other updated on relevant developments and events. In addition, throughout the year regionally targeted workshops are being organised to advance discussions in the context of our global insights and innovation tools.

As part of World Energy Week LIVE 2021, a conversation focusing on Capacity building for a net-zero Africa was convened. While many African countries who signed the Paris Agreement have set out on an ambitious plan to reduce their carbon emissions to zero by 2050, many pledges and efforts by governments to tackle the causes of global warming, GHG emissions are still growing drastically. Participants explored what African countries can do to accelerate the implementation of those ambitious target and how they can prepare their populations and workforces to face some of the unavoidable changes and empower them to be enablers of a successful transition.

Furthermore, countries like Kenya and Nigeria are working to launch their own World Energy Academies aimed at advancing in capacity building and energy literacy in the region.

Some countries in the region have developed national Future Energy Leaders Programmes. These work closely with national Member Committees and support activities at the national and regional level

Energy in Africa

africa, world energy issues monitor 2024

REGIONAL OVERVIEW & CONTEXT

Commodity Prices remain Africa’s most critical uncertainty, together with capital cost and concerns over affordability. Delving deeper into the issue cost of and access to capital, Africa’s relationship with major players like China, United States and the EU becomes apparent. China’s economic engagement with Africa has experienced significant growth over the past two decades, characterised by substantial investments across various sectors. However, recent developments such as China’s decision to reduce financial support to Africa, announced during the 2021 China-Africa Cooperation Forum, from $60 billion to $40 billion over three years, have stirred an increased interest from the United States and EU to counterbalance China’s influence. Nevertheless, there are stark differences in the approach taken by these parties, each coming with their own set of challenges and concerns for Africa over debt traps, economic dependence and prioritisation of foreign interests over local needs. Consistent with the global picture is the action priority on transmission grids and energy storage. There is a greater emphasis on supply chains and workforce, clearly due to the global demand for critical minerals increasing and new skills and competencies being required for new energy transition technologies such as renewables and hydrogen and P2X. The food-energy-water nexus has become more of an action priority than previously, but climate adaptation remains uncertain to a degree, indicating the level of vulnerability and lack of resilience on the continent. Interestingly, risk to peace is moving into the action priority quadrant, in contrast to other regions.

AFRICA REGIONAL DEEP DIVE

Major regional changes

The African continent stands at a crossroads on its journey to energy sustainability, grappling with numerous challenges while seizing a wide range of opportunities. A comparative analysis of Africa's energy priorities in 2022 and 2024 reveals a dynamic and evolving landscape characterised by shifting uncertainties and action priorities. The changes in Africa's energy sector from 2022 to 2024, especially the actions leaders are prioritising, are influenced by a mix of factors that shape energy management and priorities across the continent, forming a bigger puzzle. While certain challenges persist, such as commodity price fluctuations, access to investment capital, access and affordability, new challenges, such as stakeholder coordination have emerged. Transmission grids and energy storage were identified as action priorities with high impacts on energy and development in Africa. The active management of the food-energy-water nexus is highlighted as an action priority with high impact on people, communities, and ecosystems. Climate change mitigation imperatives are driving the need for sustainable energy solutions and challenges in water supply in different African regions continue to be exacerbated by climate change, driving adaptation imperatives and water in particular.

Accelerating regional trends over the last 5 years

Over the past five years, Africa's energy sector has experienced significant developments, including the exploration of hydrogen production, increased financing and investment, and diversification. Efforts to improve energy access and electrification in remote areas have intensified, driven by investments in off-grid and mini-grid solutions. However, ensuring energy access to affordable, reliable, sustainable, and modern energy to propel economic activities that increase income, improve living standards, and foster local development remains a key challenge across large parts of the continent. There is an increasing focus on energy efficiency, with policies promoting energy-efficient appliances and industrial processes. Additionally, the adoption of digital technologies and smart grid solutions has enhanced energy system efficiency and reliability. Furthermore, there is a growing trend towards decentralisation and distributed generation, empowering communities, including those in the agriculture sector, to generate their own clean energy. Waste-to-energy technologies are also gaining traction, contributing to a circular economy approach in energy production.

These trends collectively reflect a shift towards more sustainable, resilient, and inclusive energy systems in Africa, driven by technological advancements, policy initiatives, and a commitment to addressing energy access challenges and electricity transportation while mitigating environmental impacts. However, these policy initiatives still need to become more attractive for investors in many African countries.

Integrating people and communities in the energy transition

Emerging leadership in integrating people and communities in the energy transition in Africa is driven by a mix of initiatives from a variety of stakeholders including grassroots organisations, governments, academia, private-sector and youth, many supported by international organisations. These initiatives empower communities through capacity building, advocacy, and collaborative projects, ensuring their active participation in renewable energy adoption and sustainable development. By leveraging local knowledge, cultural practices, and innovative solutions, they foster inclusive and participatory approaches to energy transitions. This promotes social empowerment, economic development, and environmental sustainability within communities across Africa.

Key components such as grid transmission, renewable energy deployment, and enhanced energy efficiency contribute to the promotion of equitable access to clean energy technologies. Collaborative initiatives between public and private sectors, alongside targeted investments in infrastructure and innovation, are key to accelerating progress towards these goals.

A SNAPSHOT OF 2024 RESULTS

Energy financing challenges

The 2024 results highlight a pressing need for increased capital investment, resource allocation and integrated infrastructure planning to ensure reliable and affordable energy, which is crucial for economic prosperity across the region. As economic development takes precedence, climate risk and resilience are pushed down the list of priorities. As a result, climate mitigation and ecosystem restoration remain low on the agenda for energy leaders, despite the region's significant climate vulnerability and the growing importance of adaptation strategies. The African Development Bank estimates a gap in Africa’s requirements for infrastructure financing of approximately 50%.

Achieving universal access to affordable electricity in sub-Saharan Africa (SSA) by 2030 requires a significant acceleration in efforts, with a target of connecting 90 million people annually - triple the current rate. Currently, 760 million people lack electricity in the world, 80% of this population lives in sub-Saharan African nations. In this context, countries such as Ghana, Kenya, South Africa and Rwanda serve as success models for others to emulate. Extending national grids emerges as the least costly and most practical option for nearly 45% of those expected to gain access by 2030. In rural areas, where over 80% of the electricity-deprived population resides, mini-grids and standalone systems, primarily solar-based, emerge as the most viable solutions. This strategic approach, combining grid extension with decentralised solutions, can pave the way for sustainable and inclusive energy access across the region.

Financing energy development in Africa remains a critical challenge. Despite accounting for one-fifth of the global population, the region currently receives only 3% of global energy investment. To achieve their energy-related development goals, including universal access to modern energy, African countries need to double their energy investment to over USD 200 billion per year by 2030. This investment is essential for meeting their nationally determined contributions and ensuring sustainable energy access for all.

Key points related to energy financing in Africa:

Sustainable Africa Scenario (SAS): The IEA’s Africa Energy Outlook 2022 introduced the SAS, emphasising the need for innovative investment solutions to scale up energy investment across the continent. The report highlights the positive spillover effects of increasing the availability of affordable capital for clean energy projects.

Cost of Capital: Currently, the cost of capital for energy projects in African countries is significantly higher (at least 2-3 times) than in advanced economies and China. This high cost hinders investment by raising project expenses. Notably, countries’ ability to develop and implement energy policy effectively and to achieve energy goals, as measured by the World Energy Trilemma Index, remains low and affects their attractiveness to investors.

Private Investment: Scaling up private investment is crucial. Development finance institutions (DFIs) and donors play a vital role in de-risking clean energy projects. By 2030, USD 28 billion of concessional capital will be necessary to mobilise the required USD 90 billion in private investment in clean energy.

There are several finance opportunities that have been put in place to help the African energy sector, including the Sustainable Energy Fund for Africa (SEFA) managed by the African Development Bank, aimed at unlocking private sector investments in renewable energy and energy efficiency. However, addressing the energy financing gap requires collaborative efforts from governments, international organisations, and the private sector to ensure a sustainable and equitable energy future for Africa.

Collaboration and coordination needs

Each African region faces unique challenges and opportunities, and tailored approaches are essential. The table below highlights the priority actions needed from regions within the continent.

Region	Actions
Sub-Saharan Africa	Universal Access: Prioritise expanding access to electricity in rural and underserved areas. Invest in off-grid and mini-grid solutions. Renewable Energy: Accelerate investments in solar, wind, and hydropower projects. Leverage abundant renewable resources. Capacity Building: Strengthen local institutions, enhance technical skills, and promote knowledge sharing. Policy Alignment: Align national policies with regional energy goals for harmonised development.
North Africa	Cross-Border Cooperation: Collaborate on energy infrastructure projects (such as interconnectors) to enhance energy security. Energy Efficiency: Implement energy-saving measures in buildings, industries, and transportation. Investment Promotion: Attract private investment by creating an enabling environment and offering incentives.
West Africa	Transboundary Projects: Develop regional power pools for efficient energy exchange. Clean Cooking Solutions: Promote clean cooking technologies to reduce indoor air pollution. Grid Expansion: Invest in transmission and distribution networks to improve reliability.
East Africa	Geothermal Potential: Tap into geothermal resources for sustainable power generation. Community Engagement: Involve local communities in energy planning and decision-making. Innovation: Explore innovative financing models and technology adoption.
Central Africa	Hydropower Development: Leverage abundant water resources for hydropower projects. Forest Preservation: Promote sustainable biomass use to preserve forests. Investment Partnerships: Collaborate with development partners for funding.
Southern Africa	Energy Trade: Enhance cross-border electricity trade to optimise resource utilisation. Mining Sector: Address energy needs of the mining industry, a significant energy consumer. Climate Resilience: Factor climate change adaptation into energy planning.

These priorities can be adapted to each country’s specific context, considering social, economic, and environmental factors. Effective implementation of these actions will improve the wellbeing of people and planet and advance their performance across the World Energy Trilemma dimensions - energy equity, energy security and environmental sustainability.

Climate risk and resilience

Climate adaptation remains a key action priority for Africa. According to the Intergovernmental Panel on Climate Change (IPCC), Africa is a low emitter of greenhouse gases, but is very vulnerable to climate change risks, with some regions being “hotspots” and warming more on average than the rest of the world. The continent is already experiencing severe impacts, including droughts, decreased crop yields, reduced economic growth, and loss of life. Climate adaptation is therefore critical for the continent and impacts many of the opportunities highlighted above. Investment into energy and related infrastructure projects must prioritise climate resilience and sustainability. Given that many countries in Africa rely on hydropower, energy security is also at risk in periods of severe drought.

FINAL CONSIDERATIONS

Africa's energy landscape presents a dynamic and evolving picture, marked by a balance between challenges and opportunities. The period from 2022 to 2024 has seen significant shifts in priorities, with emerging concerns such as stakeholder coordination and energy storage gaining prominence alongside persistent challenges including commodity price fluctuations and access to investment capital. Despite these challenges, there is a growing momentum towards sustainable and inclusive energy systems.

However, financing remains a critical hurdle. Addressing this challenge requires innovative solutions and collaborative efforts from governments, international organisations, and the private sector. As the region transitions to sustainable and resilient energy systems, tailored approaches will be essential. Each country must prioritise actions according to its unique context, ensuring that efforts are both effective and sustainable.

CONVERSATION STARTERS FROM THE WORLD ENERGY ISSUES MONITOR 2024

What are the specific challenges anticipated in the regional energy context in the year ahead, considering factors such as geopolitical disruptions, energy security, gas crises, workforce shifts, social unrest and equity concerns?
Is the evolving policy and regulatory landscape in the region aligned with the principles of a just energy transitions? How is a just energy transition defined and prioritised within the continent? What new conversations should be held?
How can we address the complex interplay between critical uncertainties surrounding capital costs and affordability in the energy sector? What implications does this have for energy access?
What efforts are being made to promote industrialization around critical minerals to foster economic development and social upliftment? Additionally, what steps are necessary for achieving a just transition, and what are the trade and energy trilemma implications?
In what ways can prioritising action on transmission grids help to better interconnect the continent and enhance resilience to climate change? How can climate finance play a role in accelerating these efforts?
What innovative mechanisms of stakeholder coordination can be employed to enhance accessibility and effectively manage the energy trilemma?