There is a burning demand for private investments when it comes to clean energy in Africa. There is a call for, among others, increasing energy demand, bridging the acute energy deficit and tapping the abundant renewable energy sources such as solar, hydro, wind and bioenergy.
Considering these, recently, the African Business Forum was held here in the capital.
On the occasion, several panelists had reflected their views.
The Co-Chair, Global Commission on the economy and climate Dr Ngozi Okonjo-Lweala indicated that, energy demand in Africa is increasing and will continue to mount. Population growth, a growing middle class, industrialization, trade and urbanization are the major factors for the upswing.
The availability of various forms of cheap renewable energy sources across the continent can draw the attention of international investors. This makes Africa one of the key regions in the world for transformative clean energy development, the reliable destiny for the private sector if an enabling policy and regulatory environment are there.
Due to prioritizing other sectors such as education and health, as public investment has ebbed out, the private sector has become a viable alternative.
According to Negozi, Africa has a potential to increase the installed capacity by adding between 110Giga Watt and 200 Giga Watt of renewable power by 2030.That is believed to absorb close to 400 billion dollar investment.
The exploitation of renewable energy is instrumental for developing green economy which can mitigate the pervasive climate change and global warming that could cripple country’s effort to reduce poverty.
The continent’s youth, which forms the biggest slice of the population size aspire for a better living condition and such situation is un attainable without creating jobs.
According to experts, the energy sector indirectly could create job opportunities for 65 million people.
To realize this, expanding labor-intensive manufacturing industries— textile and textile products, sugar leather and leather products— propelled by energy is vital.
The Information and Communication Technology sector which consumes 40 percent energy can also absorb the educated unemployed youths in urban centers.
The Executive Director Energy For African Growth Alian Ebobisa on his part said that, Africa has abundant carbon -based energy resources such as coal and oil .Their utilization has continued to aggravate global warming. But utilizing technology it can be used mixing it with renewable energy.
The continent has the potential to produce 40 percent of its electric energy from natural gas but it needs at least two decades long infrastructural development.
Currently, 56 percent of Mozambique’s energy investment leans on the private sector. But still mobilizing finance remains a challenge. Thinking out of the box is essential.
South Africa has lowered energy tax to attract the private sector and to mitigate the possible investment risk.
To make the scheme more viable, the government works in collaboration with African Development Bank and foreign capital institutions. Moreover, it subsidizes the sector outlaying up to 13 billion USD per year.
Nigeria spends 3 percent of its GDP to encourage private sectors involvement. In Egypt the private sector has already developed 15000 Megawatt from solar power.
Countries such as Senegal, Nigeria and Mozambique have showed political will to facilitate and attract investment .But so far no one showed interest to invest on coal.
The panel was attended by the head of states from Mozambique and Zimbabwe.
The Zimbabwe President Emerson Muangaga on his part said that, the transition of Zimbabwe from traditional biomass and carbon based energy to the renewable one is a tad different from other African countries.
Decades-long economic sanction imposed by the western countries, which remains uplifted, hampers the country’s development endeavor. Had this not been the case the picture would have be different. investment in the energy sector would have flourished.
As to him, currently, due to the absence of global private finance the top most agenda has focused on ensuring food security than financing other sectors.
The old energy public firms installed to generate power from hydro sources are working bellow their capacity. And due to inclement weather which frequently surfaces, the capacity of Karibu dam, the biggest in the country, has tumbled down from generating 11000 Megawat to only 100Megawat.
Also, such power deficit is prevalent in the southern African countries such as South Africa, Namibia and Botswana.
Muangaga further said that, every country should realize that industrialization needs energy. Hence, creating enabling environment for attracting private investment is crucial.
Zimbabwe has abundant mineral sources. They enable it to produce 60 thousand megawatt. But to extract the resources there is a need to consolidate infrastructure, capital and technology. The Southern Africa countries are subject to the dearth of energy and 2 trillion USD is needed to alleviate their energy deficit.
The US-based energy firm, the Pacific Investment Management Strategist Scott Matters said that his company is interested in investing in Africa particularly in renewable energy taking a minimized risk.
The availability of stable macroeconomic policy and vibrant legal system, which could be a safe haven in case disputes arise among his company and other parties, are topmost requirements.
Asked whether his government resorts to mobilizing financial and skilled labor from diaspora residing all over the world, President Muangaga told that he met his fellow Zimbabwean several times. They had made productive discussion and positive feedback is collected. He noted his government is formin the groundwork to attract them.
Rwanda is a good example in this regard. Though 80 percent of the population use biomass energy for its daily need, the government has achieved an outstanding result and the diaspora energy investment is on the pipeline.
Ethiopia as a predecessor country in renewable energy development, it has been implementing its Climate Resilient Green Economy for the last decade and half. To meet the objective, it has constructed many hydropower dams, developed wind farms, and cultivated geothermal is undergoing.
Mixing bioenergy , such as ethanol , with benzene is also practiced long ago. Though the nation is registering tremendous achievement in boosting the sector, it has still fulfilled only 20 percent of the demand.
The Hidasie dam (GERD) ,which is under construction and expected to generate 6 thousand Megawatt, can boost the nation’s foreign currency earning capacity through energy export.
Economists predicted that it can fetch 100 billion USD annually. It could ease scarcity of hard currency which is key for the nation’s economic stride.
The renewable energy development not only helps in meeting the energy demand but also plays a crucial role in mitigating climate change and global warming. The utilization of hydro-powered rail transport in the capital is a case in point.
The mass transportation can take many people at one go .Had the transportation work been effected via small vehicles, it would have consumed more carbon-based energy and exuded carbon dioxide that pollutes the environment. Not only that, it will also substitute the imported-carbon-based energy and save hard currency outlaid for that.
The Ethiopian Herald Sunday edition March 1/2020
BY ABEBE WOLDE GIORGIS
