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Africa Needs Sizeable and Quick Investments to Provide Energy and Adapt to Climate Change

April 25, 2010

WASHINGTON, April 25, 2010 — Overcoming Africa’s energy deficiency—one of the continent’s most crucial priorities—won’t be achieved by incremental increases in energy supply but by “a substantial leapfrogging”, which requires access to significant new finance.

Speaking at a seminar Saturday on climate change and Africa at the ongoing World Bank and International Monetary Fund Spring Meetings in Washington DC, Prof. Ogunlade Davidson, Sierra Leone’s Energy minister, said the focus on improving efficiency in energy distribution in Africa should be replaced by a far bigger priority – energy supply. 

Global inequities in access to energy are startling: only 24 percent of Africans have access to modern energy, compared with around 50 percent in South Asia and 80 percent in Latin America. In Rwanda, 93 percent of the population has no electricity; in DRC, that number is 94 percent. “Even if we improve efficiency, it will deliver few gains as the supply base is so low,” said the minister.

Africa Region Vice President Obiageli Ezekwesili said climate change was a development challenge for Africa as between 75 and 250 million Africans live in water stressed environments due to weather variability or climate change. Financing, she said, must become a core issue in the dialogue as, by current estimates, Africa needs about US$18 billion per year for adapting to climate change. This is in addition to the estimated US$23 billion per annum required to expand energy access in Africa.

Ezekwesili said that, working with other partners, the World Bank can help to reform the carbon finance regime so that it works better for Africa and generates more resources. This will involve scaling up development assistance and generating more resources from climate investment funds. These partnerships can also tap initiatives such as Reducing Emissions from Deforestation and forest Degradation or REDDs, which aims to make forests have greater value standing than cut down.

The Africa Vice President said the World Bank can help countries to optimize the fast-start financing committed in Copenhagen by channeling these resources to investments that will deliver quick returns.

Explaining the context to the seminar participants, World Bank Africa Sustainable Development Director Inger Andersen said soils are currently out of the carbon trading regime but need to be part of the discussion to ensure better land practices and food security.

She said African voices weren’t being heard strongly enough in the negotiating rooms and that private sector financing for climate change was under tapped.

Tosi Mpanu Mpanu, chair of the Africa group of climate negotiators, highlighted the significant opportunities Africa could reap from climate mitigation measures. “Deforestation contributes 20 percent of global emissions: if you cut deforestation in half you will have reduced emissions by 10 percent,” said Mpanu. “Funding for climate change must be additional to Overseas Development Assistance: we must explore levies on air and sea travel, and we must make our policies sound in order to attract investment,” said the environmental campaigner from the DRC.

African Development Bank head of infrastructure Robert Pittman told the meeting that there were many examples of local entrepreneurs in Africa investing in the energy sector to expand access. He cited the wind energy farm near Lake Turkana in northern Kenya which will supply 20 percent of the country’s energy needs by 2016.

He said Kenyan entrepreneurs saw the opportunity of supplying energy at $ 0.17 per kilowatt hour through this renewable source which was about half the cost of the thermal generated electricity that forms part of Kenya’s energy mix.

Pittman said Nigeria’s energy sector was attracting significant private sector interest and noted the importance of “climate proofing” development and infrastructure projects through design that takes account of harsh weather variability.

Wrapping up the session, the Africa Vice President said Africa needs upfront investments of scale to make large hydropower projects such as the Grand Inga dam on the River Congo a reality.

Ezekwesili highlighted the need to end the cacophony from different African stakeholders on climate change: “Africa spoke with one voice at Copenhagen – it is important to harness that spirit of solidarity as we look to Cancun.”