Corporate Africa reports on how Africa’s transition presents opportunities for investment in the continent.
In the ever-evolving landscape of energy consumption, Africa stands at the forefront of a paradigm shift, transitioning from traditional energy sources to a more sustainable and renewable future. This transformation not only promises to reshape the energy sector but also holds immense potential for investors seeking to make a lasting impact on communities across the continent.
With its rich natural resources and vast untapped potential, Africa is embracing a future powered by renewable energy. This transition is driven by a collective commitment to reduce carbon emissions, improve energy access, and foster economic growth. Investors eyeing the African renewable energy sector are presented with a unique opportunity to be catalysts for change while reaping the benefits of a burgeoning market.
Climate change shaping investment Post Covid-19
Africa’s historical reliance on hydropower as a renewable energy source is undergoing a transformative shift with a growing focus on attracting substantial investment. While countries like Egypt, Ghana, Zambia, Zimbabwe, and the Democratic Republic of Congo have traditionally harnessed hydropower for their energy needs, future investments are expected to pivot away from this source. The unreliability of Africa’s water resources, exacerbated by the disruptive impact of climate change on weather patterns, has underscored the need for diversified and sustainable alternatives.
The World Health Organization estimates that only 28 per cent of health facilities in Sub-Saharan Africa have access to affordable and reliable power.
Solar, wind, and, under favorable conditions, geothermal and marine energy emerge as the frontrunners poised to receive substantial investment. Investors, who may have hesitated to engage with the continent during the Covid-19 pandemic, are regaining confidence in Africa’s evolving energy landscape. This strategic shift not only reflects the imperative of adapting to changing climate dynamics but also positions Africa as an attractive destination for investment in the renewable energy sector.
Where you should Invest
As governments across Africa set ambitious renewable energy targets, the continent is becoming a hotspot for solar, wind, hydro, and geothermal projects. The African Union’s Agenda 2063 and various national initiatives underscore the commitment to ensuring sustainable and inclusive development through green energy.
This target has seen local and international governments with support from non-governmental organizations and aid institutions corporate to invest in renewable energies in African countries whose target is to improve accessibility and boost cooperation and investment.
Investors keen on making a positive impact on the environment and society find an attractive landscape in African renewables. The region offers a diverse range of projects, from utility-scale solar farms in the deserts to small-scale, off-grid solutions in rural areas. These ventures not only promise financial returns but also align with environmental, social, and governance (ESG) criteria.
Learning from towering investments
Kipeto, constructed on an area of about 70 square kilometers supported by the American people through USAID, has become the second largest wind power project in Africa after Lake Turkana wind power station all in Kenya, and has opened up areas previously marginalized and considered unproductive.
In Cameroon, a hydroelectric power station across the Sanaga River in southern Cameroon is expected to generate 420 Megawatts boosting the national energy production by 30 per cent. This is the largest project in Central Africa.
The unreliability of Africa’s water resources, exacerbated by the disruptive impact of climate change on weather patterns, has underscored the need for diversified and sustainable alternatives
In Northwest Africa, Egypt is home to the largest solar park in Africa. It spans 37 kilometers in Benban and has a total generation capacity of around 1.8 gigawatts, which is enough to power hundreds of thousands of homes. The Project by British International Investment collectively generates approximately around 623 Gigawatt hours (GWh) of solar power per year, enough to power tens of thousands of homes and businesses and avoid 301,000 tonnes of carbon emissions.
Learning from these investments, one of the most significant impacts of investing in African renewable energy lies in community empowerment. As projects are implemented, local communities’ benefit from increased access to electricity, leading to improvements in education, healthcare, and overall quality of life. Off-grid solutions are particularly transformative, providing energy access to remote areas that were previously underserved.
The expected impact of energy investments
With reliable electricity, schools can extend study hours, implement e-learning initiatives, and enhance the overall educational experience. Students in rural areas, once hindered by the lack of lighting, can now pursue academic excellence, narrowing the educational divide between urban and rural regions. This would apply at all levels of education which today depend on technology as research to aid research and innovation.
Renewable energy enables the electrification of healthcare facilities, ensuring access to vital medical services. Refrigeration for vaccines, lighting for surgeries, and the operation of essential medical equipment become possible, contributing to improved healthcare outcomes and pandemic preparedness.
By supporting clean energy initiatives, investors actively participate in reducing the carbon footprint, mitigating climate change, and ensuring a sustainable future for generations to come.
The World Health Organization estimates that only 28 per cent of health facilities in Sub-Saharan Africa have access to affordable and reliable power. Emerging from the challenges posed by the Covid-19 pandemic, questions persist about how the continent coped with a crisis that threatened millions of lives globally. In response to this, Power Africa in a new approach, has been actively collaborating with African governments, partners, and the private sector to address the critical issue of electricity access in health facilities across Sub-Saharan Africa. Through the Health Facility Electrification program, it targets to electrify and digitally connect 10,000 health facilities in sub-Saharan Africa by 2030.
Investments in renewable energy projects spur job creation at various skill levels, from manufacturing and installation to operations and maintenance. This, in turn, fosters economic growth, reduces unemployment, and contributes to the overall development of local economies in line with Africa Union’s agenda 2063, Africa’s blueprint and master plan for transforming Africa into the global powerhouse of the future.
Contributing to Zero carbon emissions
Beyond the socio-economic benefits, investing in African renewable energy allows investors to be stewards of the environment. By supporting clean energy initiatives, investors actively participate in reducing the carbon footprint, mitigating climate change, and ensuring a sustainable future for generations to come.
In Cameroon, a hydroelectric power station across the Sanaga River in southern Cameroon is expected to generate 420 Megawatts boosting the national energy production by 30 per cent. This is the largest project in Central Africa.
The transition to renewable energy in Africa is not just a shift in power sources; it is a transformative journey that has the potential to uplift communities, drive economic development, and safeguard the environment. Investors in this sector are not only contributing to the vitality of the continent but are also aligning with global efforts to build a sustainable and resilient future. The time is now for investors to be part of this monumental shift, where returns are not just financial but are measured in positive social and environmental change.