(Agence Ecofin) – The high cost of capital is a major obstacle to increasing investments in clean energy. Reducing risks at country and project level will require effort from policy makers as well as significant international financial and technical support.
Although spending trends vary significantly between countries, neither the total amount nor the proportion spent on clean energy is enough to put Africa on the path to achieving its Sustainable Development Goals.
In its report “World Energy Investment 2024”, the International Energy Agency (IEA) shows that, at present, investments in energy represent only 1.2% of the continent’s GDP and investments in clean energy, although increasing, represent only 2% of the global total.
The organization highlights the impact of the continent’s debt repayments which have increased sharply in recent years, weighing on governments’ ability to access the funds needed for capital-intensive clean energy projects. Generally speaking, according to the Agency, the low rating of sovereign debt further limits access to external investments. Thus in 2023, only two countries, Botswana and Mauritius, were rated “investment grade“.
If the majority of investments in clean energy that have been made recently concern the production of electricity from renewable energy sources, the growth prospects will still be limited as long as the network itself does not subject to investment and will not be modernized and extended.
With average line losses of 15%, according to the IEA, inefficient grids and insufficient interconnections are already creating bottlenecks for new renewable energy projects in the region.
Abdullah Diop
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06/06/2024 – In 2024, clean investments will outstrip those in fossil fuels
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