Africa’s energy landscape could be poised for a major shift as governments, investors, and financial institutions convene to forge groundbreaking agreements. The goal is to provide sustainable energy solutions to 300 million people across the continent by 2030. In Dar es Salaam, Tanzania, the Africa Energy Summit has brought together several heads of state from across the continent, as well as over 1000 key stakeholders governments, international organizations, and the private sector. ALSO READ: How Rwanda can attract more renewable energy investments ALSO READ: Why Rwanda is updating its energy policy The two-day summit which started on January 27 aims to, among others, drive the continent’s energy transformation and tackle the critical issue of energy access under Mission 300 -- a groundbreaking initiative to scale energy access and accelerate the continent’s clean energy transition. ALSO READ: Rwanda needs $1.5bn to achieve universal energy access It is expected that the summit will unveil new initiatives aimed at boosting domestic resource mobilization and encouraging cross-border trade to spread risk and increase financing for energy access. Here is what you should know; Practical commitments This week’s summit, according to the organizers, is expected to yield two significant outcomes: the Dar es Salaam Energy Declaration, outlining commitments and practical actions from African governments to reform the energy sector, and the first set of National Energy Compacts, which are expected to serve as blueprints with country-specific targets and timelines for implementation of critical reforms. In the first phase, 12 countries will present their energy compacts in five key areas including low-cost power generation, regional energy integration, increased energy access, enabling private investment, and utility strengthening. “The time to act is now,” according to Franz Drees-Gross, World Bank Director of Infrastructure for West Africa. “Mission 300 represents not just an ambitious target but a movement. We are creating a lasting impact that will power Africa’s growth and enable millions of people to access the essential services electricity provides,” Drees-Gross said in a virtual press briefing. Mission 300, a brainchild of the World Bank Group and the African Development Bank, seeks to bridge the persistent energy access gap on the African continent by leveraging innovative technology and financing. “Actual connections” The Dar es Salaam summit is expected to highlight energy sector successes in selected countries, establish an alliance of sector stakeholders to accelerate energy infrastructure investments and strengthen regional power planning, market trade, and policy frameworks to support the implementation of the Continental Master Plan and the African Single Electricity Market. Organisers say that Mission 300’s approach entails both traditional grid expansion and innovative off-grid solutions to reach remote communities. The program will prioritize sustainable financing models and address critical challenges such as currency mismatches in project funding. “It's a tight journey because 2030 is only five years away and we have to deliver, not expected connections, but actual connections to 300 million by 2030,” said Daniel Schroth, African Development Bank’s Director for Renewable Energy and Energy Efficiency. Schroth shared similar sentiments with the International Finance Corporation (IFC)’s Director for Infrastructure in Africa, Sarvesh Suri. “What makes this initiative different from what institutions have done in the past is the ‘all hands on deck approach’ with a lot of institutions working hand-in-hand to deliver the ambitious agenda,” he explained. Financial institutions, such as the International Finance Corporation (IFC) are expected to outline new investment vehicles and funding initiatives to support the private sector’s role in advancing distributed renewable energy solutions The stark reality Across Africa, nearly 600 million people which is approximately half the continent’s population still live without access to electricity. For these individuals, according to Kevin Kariuki, the Vice President for Power, Energy, Climate, and Green Growth at the African Development Bank Group, daily life is a struggle illuminated by the dim glow of kerosene lamps or the intermittent hum of diesel generators. Kariuki argues that with the current pace of electrification and with Africa’s rapid demographic growth, the number of people without electricity will remain largely unchanged unless ‘we take bold and immediate action.’ For Kariuki, what makes this challenge significant in Africa is that, for many decades, the power sector has faced numerous interlocking challenges which include inter alia, low access rates, lack of maintenance, lack of investment, non-cost reflective tariffs, unaffordable subsidies, and lack of financial sustainability. Most of Africa’s public utilities, he pointed out, are in financial distress - they struggle to cover their operating costs and cannot finance the required capital expenditure to maintain their operations, thus forcing them to rely on public subsidies. At the same time, most of the financing available for energy projects today is in hard currency, which is not always sustainable because energy services are paid for by local populations in local currencies, thus resulting in a currency mismatch occasioned by the volatility of local currencies against international hard currencies. Unveiling the plans Industry experts stress that energy is the engine of development, maintaining that without affordable, reliable, and sustainable electricity, Africa cannot achieve its developmental aspirations or secure “its rightful place” in the global economy. It is expected that Mission 300 will invest in new and rehabilitation of generation capacity, and transmission systems, including intra- and regional interconnections, as well as distribution grids to build robust and reliable power systems. Reforms in the energy sector are also expected to complement it to ensure affordability and sustainability of electricity service, and financially viable utilities while partnerships with the private sector will assist in mobilizing funding at the required speed and scale. “The plan focuses on accelerating electrification through a mix of grid extensions and distributed renewable energy solutions, such as mini-grids and stand-alone solar home systems. These solutions are particularly effective in reaching fragile and remote areas where traditional grid infrastructure is impractical. Complementing these efforts are investments in generation, transmission, regional interconnection, and sector reform to ensure that power supply is not only reliable but also affordable and sustainable,” a statement from the AfDB reads in part. Leaders need to change tack Experts are also calling on African leaders and their governments to lead the charge by implementing critical reforms to make the energy sector more efficient and utilities more robust. For instance, experts pointed out that transparent and competitive tendering processes for new generation capacity, along with cost-recovery mechanisms for utilities, are essential. Regulators will have to respond with appropriate nimbleness and innovation to stay responsive to a fast-changing technological and business environment. Also growing are calls to Governments and development partners to amplify the call for regional electricity trade to facilitate a shift away from the single-buyer model as well as allow the sustainable integration of Variable Renewable Energy (VRE) into weak grids to help shape the energy transition pathways of African countries.
