Why 571m Africans still face dark nights

Efforts to boost the rate have lagged, as many countries struggle to develop adequate infrastructure to effectively distribute the energy generated within their borders or to harness renewable energy resources they are richly endowed with.

International investors in the sector have also largely steered clear of the region, with less than three percent of global investments in energy going to the continent, leaving the burden of developing the industry on cash-strapped governments and development institutions.

This has left many countries to grow their energy access rate at their own pace, but the slow progress is now taking a toll on the continent’s economy, with an estimated three percent of its GDP being lost every year to the energy access gap, according to the African Development Bank (AfDB).

“We can have Africa develop with pride, because it cannot develop in the dark and we’re determined that it’s time for Africa to solve this particular issue,” said AfDB President Akinwumi Adesina.

The continental lender, along with World Bank, is rallying African governments towards a dream of halving this access gap by 2030, connecting at least 300 million people on the continent to energy.

But, with dwindling fiscal spaces for the governments, rising indebtedness, and stagnating private sector investments, the two development financiers warn that a lot must change to realise this dream.

World Bank President Ajay Banga told the Mission 300 Africa Energy Summit in Dar es Salaam on January 27 that a lot of reforms of public institutions will go into realising this dream.

A key challenge that’s been slowing the progress, according to Mr Banga, is the unpredictability of policies in the energy sector, which kills investors’ appetite for investing in the continent’s energy sector.

“The moment you create unpredictability in that regulatory policy, you leave people with the decision that says, I’ll take my money and go play elsewhere. That has to change,” he told the convention. “There must be predictability of tariffs, predictability on land acquisition, predictability on all the things required for this investment to be stable.”

Dr Adesina agrees that individual countries must instigate change in their policies to realise this dream.

“There’s got to be country-led actions that actually show that they’re going to deliver electricity to their people,” he told the forum. “Utilities have to be reformed. They have to reduce their technical and financial losses. We have to make sure that we have good independent utilities.” 

The AfDB boss also believes that to meet this goal, countries must increase the budget to support infrastructure.

“They are the ones that are going to make sure that they fill the last mile connectivity there to make sure that their people actually have access to electricity,” he said.

Financing has been a key problem. With many pressing needs such as health, education, and climate change facing governments, prioritising spending on energy has been difficult, and the development financiers realise this.

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Many of the 25 African heads of state and government who spoke at the summit did not shy away from conceding that their countries grapple with a huge deficit in financing energy access.

“In order to overcome hurdles impeding energy access, we need to take bold actions by increasing investment and financing for infrastructure development, from power generation to the last mile connectivity,” said Tanzania President Samia Suluhu Hassan.

The two lenders, which were the primary conveners of the conference, also noted the huge financing gap and committed at least $40 billion dollars towards the Mission 300 project over the next five years.

Already, the World Bank and the AfDB are key financiers of electricity connectivity projects across the continent. 

In Kenya, for instance, it is the funding from both financiers that lifted energy access from 36 percent in 2016 to 76 percent currently.

Added to the two lenders’ commitment, several other development financiers from outside the continent also pledged to inject an additional $6 billion in capital into the project.

The partners, including the Islamic Development Bank, the Asian Infrastructure Investment Bank, the Opec Fund, and the French Development Agency, pledged to channel the amount directly to connectivity projects, in addition to other investments they’re already making on the continent.

But even with the increased financing, the leaders and financiers agreed that policies must change on the continent to make the mission possible.