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Opportunity Africa: Powering the future, now

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Opportunity Africa: Powering the future, now

Opportunity Africa: Powering the future, now
Photo credit: APP

Remarks by Kofi Annan, Chair of the Africa Progress Panel, at the AfDB Annual Meetings 2016 High Level Side Event entitled “Africa’s Energy: What’s the New Deal?”

Distinguished Guests, Ladies and Gentlemen,

I am pleased so many of you, all influential leaders in your fields, have joined us here in Lusaka today.

The challenge before us is huge. Yet so is the opportunity.

It is unacceptable that today 621 million Africans still do not have access to modern energy.

This intolerable, avoidable and profoundly unjust state of affairs, is harming lives and hindering progress across Africa in myriad ways.

An estimated 600,000 Africans die each year as a result of household air pollution caused by the use of firewood and charcoal for cooking, half of them children under the age of five.

Energy sector bottlenecks and power shortages cost the region 2-4 per cent of GDP annually.

As a result, health care, education and manufacturing capacity all suffer.

This situation also consistently undermines efforts to promote growth and create jobs, at a time when the continent faces a huge youth bulge with millions entering the job market every year.

We need to quickly power up Africa’s future now – so strong partnerships are essential.

I therefore congratulate President Adesina for launching the Africa Development Bank’s New Deal on Energy for Africa to address the challenge of achieving universal access to energy on the continent by 2025.

I am pleased that numerous partners, including many leaders who are with us here today, have already rallied to the call.

The Africa Progress Panel, which I chair, firmly believes that this generation of African leaders has a unique opportunity to deliver on the promise of energy for all.

That is the main message of our report Power, People, Planet: Seizing Africa’s Energy and Climate Opportunities.

Leaders within the public and private sector all have a critical role to play.

African governments must create the right policies and enabling environment.

They need to open up the energy market to drive investment in the sector. Regulatory, policy and sectoral reforms – especially in banking – are essential.

The transformation we seek also requires decisive action on the part of Africa’s leaders in reforming inefficient, inequitable and often corrupt utilities that have failed to provide firms with a reliable power supply and people with access to electricity.

Boosting access to energy will end the cruel paradox in which, cut off from the grid, some of the world’s poorest people pay some of the world’s highest prices for power.

Rolling black-outs across many African countries are not only frustrating for many citizens but also costly for the nation.

Success depends on governments addressing two distinct but related challenges.

First, Africa needs much more power generation to create the jobs and prosperity that its citizens have a right to expect.

Second, Africa needs an accelerated drive to achieve universal access. It is intolerable that so many Africans are living without even the most rudimentary benefits of modern energy.

Every government must draw up strategies to achieve universal access to energy.

At the same time, I urge more investors to see Africa – both on and off-grid – as an opportunity, not a risk.

The financial sector should also be more ambitious in seizing the rich opportunities available in this sector in Africa.

Over the past year, the momentum for powering up Africa has grown. Now we must build on this momentum urgently.

Achieving the energy transition in Africa requires that long-term national interest override short-term political gain, vested interests, corruption and political patronage.

Ambitious, efficient and properly financed multilateral cooperation is also vital to help African countries build their climate change resilience and lay the foundations for a low-carbon future, while making the transition away from fossil fuels.

It is refreshing to see a rise in the number of forward-looking companies driving innovation and seeking opportunities to fund low-carbon development across our continent. Many are also demanding a price on carbon, accelerating the low-carbon transition.

Today we will hear from some of the pacemakers and leading innovators, who are showing the way to turn bold visions into tangible reality.

They are here to inspire us with their personal stories of what can be done, what must be done, and what is being done.

Ladies and Gentlemen,

We have a great opportunity to power up the future now in Africa.

Let us start today.


Opportunity Africa: Powering the future, now

Introduction

“It always seems impossible until it’s done,” Nelson Mandela once said. He was reflecting on the struggle to overturn apartheid, but his words have a powerful resonance today. The challenges are immense. To eradicate poverty, create jobs and sustain growth while limiting greenhouse gas emissions, we must fundamentally realign the energy systems that drive our economies with the ecological systems that define our planetary boundaries. The consequences if we fail are beyond estimation. Yet alongside the risks this is a moment of great opportunity for Africa and the world.

Low-carbon energy systems are at the heart of the opportunity. Climate change raises immensely complex financial, technological and political problems, all of which point towards a single solution. Over the next few decades, governments have to break the link between economic growth and greenhouse gas emissions. Making the transition to a low-carbon future is an imperative for the well-being of future generations. It is also an opportunity to develop green energy strategies that can underpin growth, job creation and shared prosperity.

African leaders have rightly highlighted the immense risks associated with climate change, but insufficient attention has been directed to the opportunities. No region has more abundant or less exploited low-carbon energy resources. Harnessed to the right strategies, these resources could resolve two of the most critical development challenges facing Africa: power generation and connectivity. Renewable energy could do for electricity what the mobile phone did for telecommunications: provide millions of households with access to a technology that creates new opportunities.

Some countries in the region are emerging as global leaders in climate-resilient, low-carbon development. The world as a whole stands to gain from Africa avoiding the carbon-intensive pathway that has been followed by today’s rich countries, China, India and other emerging markets. Policies to advance climate-resilient, lowcarbon development are first and foremost the right policies for Africa. Increased agricultural productivity, land conservation, the development of renewable energy and low-carbon transport systems have the potential not only to reduce future greenhouse gas emissions, but also to reduce poverty, support economic growth and improve people’s lives.

Energy provides the link between climate action and efforts to reduce poverty. Dependence on biomass for fuel contributes to land degradation and loss of forestry resources. The energy crisis is part of a vicious circle that is jeopardizing Africa’s prospects for eradicating poverty and achieving the Sustainable Development Goals.

Climate risks reinforce the vicious circle. Africa has made the smallest contribution to global warming but it is experiencing the earliest and most damaging impacts of climate change. Governments around the world have pledged to limit global warming to less than 2˚C above pre-industrial levels. Delivering on that pledge will require concerted action. We are currently on a trajectory that will raise average temperatures by 4˚C and set the scene for unprecedented reversals in human development in the second half of the 21st century.

So great are the energy challenges and so severe the climate risks that it is easy to lose sight of the opportunities. Increasing power generation and accelerating progress towards energy for all could transform productivity in agriculture and industry, driving growth and creating jobs. Providing every African household with access to affordable electricity and clean cooking facilities would boost efforts to reduce poverty and create new market opportunities for investment.

These are not idle ambitions. The Global Commission on Economy and Climate, headed by Felipe Calderón, the former president of Mexico, has documented the potential that renewable technologies could unleash. The world is on the cusp of a green energy revolution. Africa has some of the world’s most abundant and least utilized renewable energy assets and is well placed to join that revolution. Through the African Union Assembly, governments have pledged their political will at the highest level to accelerating the deployment of renewable energy. The focus now is on the honouring of commitments. We have not yet built two-thirds of the energy infrastructure that will be in operation by 2030 and investment decisions made today could lay the foundations for a competitive low-carbon energy system.

The idea that countries in Africa have to choose between low-carbon development and economic growth is becoming increasingly anachronistic. Making the early investments needed to support a low-carbon transition has the potential to boost growth and expand power generation. However, realism is required. Recommendations that Africa abandon fossil fuels in favour of a leap into renewable energy are unrealistic. Fuels such as coal will represent a shrinking share of the region’s energy portfolio. The smart money for the future is on natural gas and green-energy sources. But African governments are rightly concerned by the double standards of some aid donors and environmental groups who, having conspicuously failed to decarbonize their own energy systems, are urging Africa to go green at an implausibly rapid rate.

An energy revolution is already under way. Utilities are being reformed, independent power providers have emerged as a dynamic new force and companies have developed innovative new business models to reach people who are not yet connected. Renewable energy sources are bringing light to rural communities living far beyond the grid. Planned urbanization could take the energy revolution to the next level through investment in low-carbon transport and energy provision.

The reforms need to be deepened. As a priority, governments should be converting the US$21 billion wasted annually on energy subsidies into productive investment. They should also be attaching far more weight to equity, giving everyone an equal opportunity to obtain energy. Africa’s energy systems have been designed and operated to provide subsidized power to small, predominantly urban elites, with scant regard for the poor. Unequal access to energy has reinforced the wider inequalities linked to wealth, gender and the rural-urban divide that have accompanied the economic growth of the past 15 years. Yet here, too, there are encouraging signs of change.

As well as posing risks, climate change provides Africa with opportunities to play a global leadership role. Several countries are pioneering climate-resilient growth strategies that hold out the prospect for “triple-win” scenarios. To take one example, restoring degraded land and preventing deforestation could increase agricultural productivity, cut poverty and reduce Africa’s contribution to global warming. One-fifth of global emissions associated with landuse changes originate in Africa and cutting these emissions is vital to international efforts aimed at avoiding dangerous climate change.

Responsibility for seizing the opportunities associated with energy and climate rests primarily with African governments. These governments will be answerable to their citizens – and to future generations – for the decisions they make at this critical juncture.

National responsibility does not detract from the critical role of international cooperation.

Effective international cooperation will transform what is possible in Africa. Increased support for investment in renewable energy and more sustainable land use could greatly expand the scope for development of low-carbon energy, forest conservation and the restoration of degraded land. Reforming a hopelessly fragmented, underfinanced and poorly governed set of climate-finance institutions could enhance Africa’s prospects for managing climate risk and delivering energy for all.

International cooperation is a two-way street. Now, as never before, Africa must be part of an international community that delivers multilateral solutions to shared global problems. It is time to move the debate on Africa and international cooperation well beyond the restrictive confines of aid.

Confronted by challenges of the magnitude of those associated with Africa’s energy crisis and climate change, it is easy to slip into fatalism. Yet fatalism is a luxury that Africa and the world cannot afford. The tasks ahead are daunting. Turning the principles of sustainable development into practical national policies and multilateral cooperation may seem impossible.

But it always seems impossible until it’s done.

Infographic: The energy leapfrog

The energy leapfrog infographic APP May 2016

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