"AfDB to launch Clean Energy Investment Framework for Africa" - Interview with Peter Njoh Ngomba, Manager, Operations Policies and Compliance Department
Global climate change has emerged as an important challenge facing Africa. In the light of mounting evidence of its causes and effects, the Heads of State and Government of the G8 States, at their Gleneagles Summit in July 2005, called upon the World Bank and regional development Banks to prepare specific proposals to address three inter-related issues: expanding access to reliable energy supplies particularly for the world poor; promoting investment in clean energy and low-carbon approaches to economic development; and supporting developing countries in undertaking concrete measures to adapt to climate change and strengthen their capacities to manage increasing climate variability and extreme weather events.
Lessons Learned in AfDB energy sector operations The African Development Bank has supported its Regional Member Countries (RMCs) in their energy development efforts for almost 40 years. Energy sector approvals account for about 12% of Bank Group total approvals since 1967. Important lessons have been learnt in the course of implementing its operations, including the following:
- Large-scale power projects remain vital to meeting the growing energy demands of urban areas where a growing segment of the population and the bulk of economic activities are located;
- However, the energy needs of the rural areas where more than one half of the African population lives cannot be met exclusively by extending national power grids to rural areas; decentralized local solutions have a role to play;
- Regional cooperation and market integration are crucial to secure energy access-for-all in most African countries;
- The private sector and public-private partnerships present considerable potential waiting to be exploited; and
- Consensus building and mutual understanding among a range of stakeholders are crucial to expediting energy development.
- Energy production – in electricity generation, transport, and industries - is responsible for roughly two-thirds of global greenhouse gas emissions;
- Africa’s energy production is about 9.5% of the world’s total output, but the continent consumes only about 3% of global energy output; it is therefore a net exporter of energy resources;
- Hydropower represents 45% of electric power generation in sub-Saharan Africa, but less than 4% of the sub-continent’s commercially exploitable potential has been tapped; and
- The African continent’s share of annual global emission of greenhouse gases (GHGs) is just 4.9%.
In addition, African leaders devoted a major segment of their African Union summit in January 2007 to address the challenges posed to the continent by global climate change and adopted an Action Plan for Africa on climate information for development needs. Peter Njoh Ngomba, Manager at the Operations Policies and Compliance Department, unveils AfDB's Clean Energy Investment Framework.
Q: Why is the African Development Bank eager to launch a new framework for clean energy investment?
This framework is the AfDB’s response to the request of the G-8 as well as to the concerns of the African leaders about climate change and energy scarcity. It represents a comprehensive framework for dealing with the challenges of increasing energy access and making maximum use of clean energy options in Africa. It deals with the key issues, challenges, opportunities as well as the resource requirements and the role the Bank will play in expanding energy access and developing clean energy, thus contributing to global climate change mitigation efforts. AfDB’s approach to Clean Energy Development advocates a three-pronged approach: maximize clean energy options, through renewable energy and clean technology; emphasize energy efficiency; and enable African countries to participate effectively in carbon credit markets by meeting the requirements of the Clean Development Mechanism (CDM).
Q: What is the potential for clean energy in Africa?
There is a lot of untapped potential of clean energy on the continent. African countries, especially in Sub-Sahara Africa, need to make greater use of their huge largely untapped renewable energy potential, especially hydropower, geothermal energy, solar and wind power, and more efficient use of biomass. The development of such energy options could be financed in part by sale of certified carbon emission credits. Equally important is the need to promote greater energy efficiency and conservation, while investing in greater energy access.
Q: Talking of finance, what is the scale of the investments needed to develop such clean energy potential on the continent?
Financing requirements for expanding Africa’s energy supply to meet the needs of the entire population, including rural areas, while increasingly exploiting clean energy sources, are enormous. This calls for concerted efforts by development partners and governments alike. The Bank Group has a lead role to play. The Bank will seek greater leverage for its resources by working more closely with Regional Members Countries (RMCs) on creating enabling policies and institutional environments conducive to private sector investment. As the unique financing institution dedicated exclusively to Africa, the AfDB is in a position to take on the role of providing coordination, brokerage and syndication services to RMCs, bilateral and multilateral institutions, and private development partners, in support of energy access and low-carbon development strategies. This should be the keystone of African countries’ strategies for clean energy.