Africa faces a critical moment, grappling with climate change while holding vast clean energy and mineral resources including solar (11TW), wind (110GW), and geothermal (15GW), along with critical minerals key for the global renewable energy transition. This creates a remarkable opportunity for private-sector-led investments in clean energy solutions, fostering a greener and more sustainable future while supporting Africa's increase by 2050 in energy demand which is set to surpass the global average by 3x. However, progress is hindered by limited investments, scalability issues, institutional capacity, high transaction costs, and perceived risks. Although electrification access in sub-Saharan Africa has expanded to 50.6%, affordability remains a challenge. To harness this potential and drive sustainable development, concerted efforts are required to attract investments, facilitate technology transfer, implement sustainable policy, and build technical capacity.
A recent UN Environment Programme study underscores the potential of Africa's private sector in championing a green agenda, leading to increased GDP, higher income per capita, job creation, and collaboration between governments, businesses, and communities. Renewable energy projects, including solar, wind, geothermal, and bioenergy, project a 6.4% GDP boost from 2021 to 2050 and have the potential to create over 8 million jobs by 2050 under the 1.5 scenario. Africa also holds promise as a cost-effective hub for hydrogen production, generating 5,000 Mt annually at under $2 per kilogram. Untapped ocean renewable energy resources could significantly contribute to global energy needs. Some African nations have started integrating blue energy, such as Ghana exploring wave energy and Mauritius investing in floating solar photovoltaics.
Africa's rich reserves of critical minerals are vital for electric vehicles, solar PV technology, and wind turbines, offering lucrative business opportunities if responsibly extracted. Furthermore, innovative business models and cost-effective investments in sustainable products like energy-efficient cookstoves, advanced lighting solutions, and cool roof paint could be prospective low-hanging fruits for green businesses in Africa.
Read the full SEH Bulletin 4.