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18 Low-carbon Africa: leapfrogging to a green future Current energy context but is more likely to be a local private sector innovation: which could range from women running micro-enterprises in rural areas to medium-scale business capital to promote renewable energy. The private sector can bring investment, manufacturing capability and effective market delivery mechanisms. However, many countries in the region are currently viewed as high-risk areas for investment, while multiple renewable energy technologies are seen as in their early stages of development. The risks for private investors include: • no well-formed, effective business chains • limited financial and technical capacities of companies • a lack of secure national policy framework or strategy • regulations that do not support independent power producers of suppliers • lack of institutional capacity to support private sector engagement in the energy sector • perceived risk of new technology innovation • poorly developed markets • lack of finance to support development of the market, particularly in poor areas. Some African countries are taking the initiative to create a better environment for private sector engagement. Ghana’s Energy Sector Development and Access Project (GEDAP) seeks to create the enabling policy and regulatory environment that would help attract private sector capital. Start-up capital can be used to pilot new technology innovations, to reduce financial risk of starting a business and to increase the capacity of the local private sector. 1.4.4 Economic issues Attracting more capital to increase access to modern energy services is one of the largest challenges facing sub-Saharan Africa’s energy sector. From exploration and extraction of fossil fuels to electricity generation and distribution, African governments have traditionally struggled to raise the funds to meet total energy demand. Today, in the context of global, national and local environmental and social challenges – including the need to mitigate climate change and achieve growth in the face of natural resource scarcity – even higher amounts of capital are required for countries to develop and market sustainable, low-carbon and renewable technologies. Private sector investors have been discouraged from investing in the region’s energy sector because the country risks are often perceived to outweigh the potential benefits. New public-private partnerships offer a promising change in investment trends, helped by the global drive towards low-carbon and renewable energy generation and Africa’s abundance of natural resources. Investors such as the World Bank that are well positioned to invest also continue to drive forward unsustainable energy production there. An overview of Christian Aid’s No More Dirty Power campaign is displayed in Text box 5 (below). 1.4.5 Common past mistakes of many energy projects and policies The following are examples of errors regularly made in energy projects and policies: • prioritising technology development over delivering energy as a service to the poor Text box 5: Christian Aid’s World Bank: No More Dirty Power campaign Despite a large and vocal campaign from South African civil society in spring 2010, the World Bank agreed to a loan of £2.2bn for South African energy giant Eskom to build a new unabated coal-fired power station. The new plant will emit an estimated 25 million tonnes of CO 2 per year, and damage the air, water and health of local communities. Big industry will benefit from the electricity produced by the plant, but not ordinary South Africans, many of whom currently live without access to electricity or find the increasing electricity tariff unaffordable. Representing the views of the Southern African Faith Communities’ Environment Institute (safcei), Bishop Geoff Davies stated: ‘We believe the World Bank has no ethical position to continue financing the destruction of the planet’s climate by funding coal generation… We believe a sustainable energy future is possible if we put power in the hands of the people.’
Low-carbon Africa: leapfrogging to a green future Current energy context 19 • failing to understand the links between energy and the livelihoods of the poor, including in relation to development and poverty reduction strategies • lack of awareness on the part of non-energy specialists of the value energy plays in meeting other sectoral objectives (such as agriculture, health, education, manufacturing and so on). Under-representation of community energy requirements for cooking and space heating. Community centres, schools, medical centres and micro-enterprises all require modern energy services, in addition to households • over-emphasis on energy-supply issues in relation to enduse benefits, represented in the funding bias towards large power projects over capacity-building at local level to install, operate and maintain small-scale systems • one-directional planning of energy projects, often ignoring the need to involve communities in the planning process. Many projects have failed for providing energy services that are not socially acceptable, sustainable or appropriate to the unique needs of a given location. The failure to include energy access as part of the MDGs was a fundamental failure in recognising its importance for poverty reduction. This can be rectified in the post-2015 framework to replace the MDGs.
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