INFRASTRUCTURE
The need for
PRIVATE SECTOR INVESTMENT into
RENEWABLE ENERGY With debt and the climate crisis taking its toll across Africa, the case for private finance to help build a more sustainable energy market could not be stronger in this time of reimagining a stronger continent post Covid-19. BY VUYO NTOI*
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frica’s power infrastructure financing shortfall has been calculated at between US$40-billion to US$45-billion per annum by the United Nations, and this deficit is expected to grow alongside a rapidly urbanising and increasingly digitising young population. With the continent’s population forecast to double by 2050, energy demand will increase at an even faster rate – more than doubling by 2040, all while over half of the continent still does not have access to electricity. Reducing this deficit is more than just a game of catch up; it will take a committed, concerted effort from a wide range of stakeholders. Public bodies, over the near term at least, will be restricted in their contribution. The fiscal capacities of many African states are being constrained by a Covid-19-induced economic downturn, amidst many pre-existing debt crises and a continent-wide recession – the first in a quarter century. Private sector investment is critical to kickstarting economic revival, particularly in the energy sector. Public institutions will need to shake
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the temptation to pick up where they left off, by re-engaging high carbon emitting power plants, to accelerate the recovery. We have been presented with an opportunity to arm ourselves against future shocks by remolding energy generation activity in a manner that is considerate of current and future generations.
The reluctance to concentrate efforts on decentralised power projects opens the market to smaller, more agile independent players.
