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The International Energy Agency (IEA) has projected that approximately $110 billion will be invested in Africa’s energy sector in 2024. This surge in investment comes as global stakeholders seek to harness the continent’s vast potential for solar, wind, and natural gas production.
Continued growth in Africa’s energy landscape hinges on substantial investments aimed at enhancing energy infrastructure and developing human skill sets necessary for the global transition from fossil fuels to renewable energy sources. According to Risana Zitha, Managing Director and Head of Africa at investment bank DAI Magister, advancements in emerging technologies, decreasing costs, and digitalization are creating a viable business case for renewable energy across the continent.
However, Zitha emphasizes that achieving this potential requires a robust combination of attractive investment frameworks and proactive policy development to combat energy poverty in Africa and strengthen its role in the global energy supply chain.
Zitha stated, “A lack of investment in African energy infrastructure and maintenance has led to low energy supply with high electricity costs, contributing to extreme energy poverty and notable ‘white space’ across the continent. Secondary impacts of insufficient affordable and reliable power include diminished educational opportunities, constrained public health services, stunted economic development, and lower living standards.”
He highlighted the necessity of establishing a scalable framework to improve household access to electricity and mitigate the repercussions of energy poverty. Once implemented, such a framework could lay the groundwork for a fully functional energy market, yielding multiple benefits, including job creation and increased investment.
Zitha pointed out the diverse landscape of Africa, comprising 54 countries with varying policies, regulations, and levels of development. He noted, “No single approach to energy accessibility can be applied across the whole continent, but this does not diminish its priority. Enhanced access to energy will undoubtedly lead to a more resilient and prosperous economy. Additionally, initiatives to drive digitalization, such as adopting online payment platforms, will help reduce financial barriers for both investors and end-users.”
He added, “Africa has no choice but to leap directly to renewable energy. While countries like Nigeria, Angola, Mozambique, and South Africa have significant oil and gas reserves, the majority of African nations must focus on renewable energy sources. Energy companies that champion this approach stand to achieve high profit margins as they learn to scale their offerings effectively.”
Once a reliable domestic energy pipeline is established, the next phase will involve exporting energy to neighboring markets, thereby bolstering Africa’s position within the global supply chain. This approach will enable Africa to fully capitalize on its renewable potential and transform its abundant resources into valuable assets.
In conclusion, Zitha urged, “Efforts must prioritize the development of modern, resilient, and sustainable energy systems in Africa. If challenges are navigated effectively and energy poverty remains a central focus, Africa stands at a pivotal moment where its resources could redefine its global economic standing.” |
