COP26: The Green Energy Opportunity, Africa’s Route to Net-Zero

As global leaders gather in Glasgow for COP26 between Sun, 31 Oct 2021 – Fri, 12 Nov 2021, it is important that Africa’s interests are placed at the heart of the global climate agenda.

The landmark talks, which the US’s Special Presidential Envoy for Climate has described as the “last best chance” to keep global heating under control, come at a critical time for the Continent. Covid-19 has profoundly affected lives and livelihoods across Africa, with the region now predicted to recover more slowly than any other. Meeting the twin goals of returning to a strong growth trajectory and achieving net-zero emissions will be the defining challenge of Africa’s next decade.

As Tanguy Gahouma-Bekale, Chair, African Group of Negotiators on Climate Change highlighted in his priorities for COP26, “Africa’s situation deserves extraordinary attention” as despite being responsible for only 4% of global greenhouse gas emissions, less than any other region, the Continent’s “socio-economic development is threatened by the climate crisis.” We have already seen these threats in action as the frequency of extreme climate events has increased. 

Last year, floods in East Africa affected over a million people while the worst locust outbreak in 25 years saw another 1 million people fall into food insecurity. Investing in mitigation and adaptation measures now will be far more cost-effective and sustainable than paying for repeated waves of disaster relief.

In recent years, the narrative on climate change has begun to shift from one of limitations to one of the opportunities. Where previous approaches presented a trade-off between economic growth and climate action, the focus now is increasingly on green growth driven by the energy transition. Energy accounts for three-quarters of global emissions and ever-cheaper renewables are creating major new areas for investment with oil demand expected to peak around 2025. 

In his briefing to leaders at the G7 Summit earlier this year, the economist Nicholas Stern went so far as to describe the “transition to a zero-emissions and climate-resilient world” as the “greatest economic, business and commercial opportunity of our time”. This increasing alignment in the direction of travel between the private sector and policymakers is a cause for optimism and should be leveraged at COP26 to create a virtuous cycle of climate investment.    

With seven of the ten sunniest countries in the world and significant potential in wind and hydropower, Africa is well placed to take advantage of this opportunity. The frontline of the energy transition is now in developing and emerging markets where there is the potential to leapfrog fossil fuels and a necessity to transform large state-owned energy firms to a lower emissions model. It is crucial that Africa is not locked into carbon-intensive infrastructure which will drive up global emissions for decades to come.

The pandemic has already undermined progress in this area with the number of people without access to electricity set to rise by 2% in 2021, driven largely by Sub-Saharan Africa, at a time when rising government debt is undermining public climate investments. This only reinforces the need to diversify sources of climate finance for Africa. The commitment from richer countries to provide $100 billion a year for climate adaptation must be met and should be surpassed. At a regional level, ambitious programmes, such as the African Development Bank’s Desert to Power initiative, the Great Green Wall and the African Union’s Africa Green Renewable Initiative, show the commitment of Africa’s leaders to tackling the climate crisis and a successful COP26 would see renewed global support for such African-led investments.  

The private sector also has an essential role to play leveraging finance for investable climate-smart projects in Africa. In energy generation, clean mini-grids developed by companies such as Winch Energy and BBOXX have led the way in sustainably extending access to electricity across the Continent.

In 2019 the Private Infrastructure Development Group supported the issuance of Kenya’s first green bond to fund the development of a green student housing development. M

eanwhile, the African bank Absa launched a new investment platform to pool renewable assets in Africa and facilitate larger investments. Such scalable and replicable climate finance instruments, alongside support for investable climate-smart projects, offer a clear path for Africa to achieve sustainable growth and play its part in the global race to net-zero. It remains to be seen whether leaders at COP26 will seize this opportunity.