Powering Africa: Financing Energy and Green Growth
Date: Wednesday 8 June 2011
Venue: Lisbon Congress Center
Time: 9:00 a.m. - 11:00 a.m.
Prof. Ogunlade Davidson, Minister of Energy and Water Resources, Sierra Leone
Mr. Kevin Whitfield, Head of African Treasuries, Carbon and Financial Products Unit, Nedbank Group Limited, South Africa
Mr. Manuel Ferreira De Oliveira, CEO, GALP Energia, Portugal
Mr. Abdoulaye Diop, Minister of State, Minister of Economy and Finance, Senegal
Mr. Daniel Makokera, Director, Pamuzinda Productions
The strong economic performance of Africa during the last ten years, as well as its estimated economic growth, will lead to an ever-increasing energy demand across the continent. Unfortunately, the growth in power supply has not been sufficient.
Consequently, it has become crucial to implement concrete measures to end energy insecurity and to set Africa on a sustainable energy path. Africa has now the possibility to use its abundant natural resources coupled with an expanding number of innovative environmentrelated financing instruments, to significantly decrease its energy gap and do it, growing under a low-carbon, clean energy path that will attract more than ever the interest and participation of donors and private investors in support of strong growth, job creation, and poverty reduction on the continent.
Currently, the main challenges facing Africa’s power sector are: (i) inadequate generation capacity; (ii) limited electrification; (iii) low power consumption; (iv) unreliable services; (v) high average generation costs; and (vi) a financing gap of approximately USD23 billion per year.
To fight the aforementioned challenges, Africa will require a paradigmatic shift in the development of the power sector in order to tap into its vast renewable resources, including hydro-potential (estimated around 1,750 TWh), geothermal (estimated at 9,000 MW), wind, and solar.
These sustainable sources of energy are in the frontline to respond to the needs of Africa’s large rural and often geographically dispersed population, which will best and in some cases only be reached in the long term by offgrid technologies. Furthermore, they can provide the necessary scale to avoid dependence on costly smallscale national power systems, which are heavily reliant on expensive fossil fuel-based generation.
A shift towards clean energy solutions will allow Africa to tap into existing concessionary resources that reduce the costs and risks of such investments while providing an extremely valuable leverage of private sector resources.
An example is the USD4.3 billion Clean Technology Fund, which is expected to leverage at least four times this value in clean energy solutions, including energy efficiency, renewable energy, and sustainable transport investments.
Nevertheless, given the high costs of clean energy solutions and the existing financing gap, a portfolio of financing sources will have to be considered and sustained to meet current and future demand. This High Level Seminar provides the opportunity to examine the challenges and opportunities of the Power Sector in Africa. It also builds in the public and private finance sources, emphasizing the measures needed to attract private investments to the sector including a write-up on Public-Private Partnerships.
It draws on innovative financing mechanisms designed to raise additional funds, and ways to optimize both private and public financing methods. Finally, it examines the role of multilateral development bank and other international financial institutions that, in addition to applying their own financing mechanisms, can facilitate large-scale regional energy projects and help raise Africa’s influence and voice in the allocation, administration and absorption of global climaterelated resources.