Sustainable Energy Transition Strategy in Africa: The role of Legislative Frameworks and Investment Programs
The energy market landscape in Africa offers an array of opportunities for investments and partnerships in sustainable and renewable generation technologies, as well as in energy efficiency. Building a sustainable energy sector is fundamental for the African continent to power sustainable industrialization and trade, which underpins the African Continental Free Trade Area (CFTA) plan and thus highlights further the need for regional integration to solve Africa’s energy and climate challenges.
Ramping up sustainable energy generation capacity by 2030 according to the African Development Bank’s (AfDB) New Deal on Energy for Africa, requires a minimum of $44billion of annual financing. Maintaining and extending the pace of progress will require strong political commitment and sound governance, long-term energy planning, adequate political and fiscal incentives as well as public and private financing.
A paradox of the African energy challenge means that the shortage and high cost of energy supply in many regions coincides with inefficient, wasteful energy use due to often outdated, ineffective machinery and equipment. Energy efficiency often lacks the attention it needs for channeling investments, while other investment needs take priority. Various investment barriers and adverse market characteristics (including lack of awareness and market incentives) leave potential financially viable energy efficiency investments unexploited.
a) How to strengthen Policy and Regulatory frameworks in Africa to facilitate sustainable energy investments in Africa, with focus on:
• Legislative structures and frameworks – policies
• Funding & Investment – local, foreign
• Legal aspects
• Orientation & Awareness
b) Designing and implementing comprehensive human capacity building programmes across Africa to upskill/develop the sustainable energy sector
c) Ways to adapt financing and fiscal systems to meet potential investors and projects’ needs, especially in the following areas:
• Enhancing viability of Clean and Sustainable Energy projects via Project Risk Mitigation
• Implementing fossil fuel subsidy reforms to correct distorted incentives and improve use of renewable energy sources
• Building capacity of Local banks and local institutional investors to invest in the sustainable energy transition