Energy Ministers and investors address Africa’s need for renewable energies
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ECA Press Release 193/2012

Addis Ababa, 12 November (ECA) -  A senior UN official has warned that unless bold and effective measures were taken now, half the African population would continue to live without electricity by 2030. The alarm was sounded by Abdalla Hamdok, Deputy Executive Secretary, United Nations Economic Commission for Africa (ECA) in an opening statement today at the African Energy Ministers and Pan African Investment Forum on Renewable Energy for Sustainable Development: from Potential to Infrastructure and Services.

As Africa continues to register remarkable economic growth with an average of 5% GDP rate per annum; and with six out of the ten fastest growing countries in the world today, the  growing demand for energy on the continent needs urgent and alternative solutions, according to Hamdok.

Mr. Hamdok told the meeting of energy ministers and private sector representatives that 25% percent of the African population has access to modern electricity as compared to 50% percent in South Asia and more than 80% in Latin America. The Continent’s efforts are still geared towards investing in fossil and hydro-based electric generation and as a result, “other alternative sources of energy such as wind, solar and bio mass resources have been overlooked,” he said.

Making the case for investment in renewable energy sources, Hamdok noted they are well suited to rural areas, particularly where the national grids are less accessible. “In such areas, abundantly available energy sources such as off-grid and stand-alone solar and wind power could meet the needs of localized areas,” he said.

Further, elaborated Hamdok, renewable energy is a domestic resource and as such, provides alternatives to uncertain and increasingly expensive imports of fossil fuels which according to him, “often puts African economies at the mercy of foreign and volatile supply chains.” He told the forum that renewable energies open a new export opportunity by generating revenues in much needed hard currency through carbon crediting on the international carbon market.

Yet, despite the abundance of these possibilities, an estimated funding gap of $ US 26 billion per year is needed towards energy infrastructure. And there are other underlying challenges, including under-pricing of power and the lack of finances to build power-generating plants.

He said increased domestic public investment is needed as “no external sources can ever address all the continent’s power needs.” He recommended improving utilities’ corporate standing and creditworthiness as it would earn companies the advantage of accessing resources directly from the various capital markets.

To reduce the cost of energy production and address growing demand, the Deputy Executive Secretary called for enhancing regional power trading. To achieve this level of trading, he also called for a continental power-transmission network; harmonization of standards and regulatory systems; and tariff design based on market mechanisms.

He said the benefits of improving tariff design were enormous. “It could save billions of dollars every year which can be used as investment resources for the sector,” he said.

Further, in addition to investing in new generating plants and transmission capacities, the continent also needs to focus on improving the operating efficiency of existing power utilities. This, he said, could be done primarily through institutional reforms that could save the region up to $2.7 billion a year.

The Forum ends on Friday.

Background:

The All-Africa Energy Week (AAEW) and the Pan African Investment Forum is organized under the auspices of AU Conference of Energy Ministers of Africa by the African Union (AU), African Development Bank (AfDB), and the United Nations Economic Commission for Africa (ECA). The forum is a framework to evaluate the progress made in infrastructure development and regional energy services, consensus building on emerging issues, and high level coordination of actions and stakeholders in the energy sector.

Given that 2012 is declared as the International Year of Sustainable Energy Access for All (SE4ALL) by the United Nations Secretary-General and the UN system, the AAEW is an important opportunity to underscore the crucial role of renewable energy in achieving sustainable development in Africa by contributing to the three following goals of the SE4ALL: Ensuring universal access to modem forms of energy for all by 2030, improving significantly energy efficiency, and doubling the global share of renewable energy by 2030.

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Issued by:

ECA Information and Communication Service
P.O. Box 3001
Addis Ababa Ethiopia

Tel: 251 11 5445098 Fax: +251-11-551 03 65
E-mail: ecainfo@uneca.org
Web: www.uneca.org

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© 2012 Economic Commission for Africa