Access to energy is crucial not only for the attainment of health and education outcomes, but also for reducing the cost of doing business and for unlocking economic potential and creating jobs. Insufficient energy access manifests itself in hundreds of thousands of deaths annually due to the use of wood-burning stoves for cooking; handicaps the operations of hospitals and emergency services; compromises educational attainment; and drives up the cost of doing business. Energy access for all is therefore one of the key drivers of inclusive growth as it creates opportunities for women, youths, children both in urban and rural areas.
Africa’s energy potential, especially renewable energy, is enormous, yet only a fraction of it is being currently employed. Hydropower provides around a fifth of current capacity but not even a tenth of its total potential is being utilized. Similarly, the technical potential of solar, biomass, wind and geothermal energy is significant. While renewable energy will be prioritized by the Bank, fossil fuels will remain an important part of the overall energy mix, as is the case with several developed economies, with the Bank financing state of the art technology to minimize emissions.
The Bank has launched a New Deal on Energy for Africa, which is built on five inter-related and mutually reinforcing principles: (i) raising aspirations to solve Africa’s energy challenges; ii) establishing a Transformative Partnership on Energy for Africa; (iii) mobilizing domestic and international capital for innovative financing in Africa’s energy sector; (iv) supporting African governments in strengthening energy policy, regulation and sector governance; and (v) increasing African Development Bank’s investments in energy and climate financing.
Africa is simply tired of being in the dark. It is time to take decisive action and turn around this narrative: to light up and power Africa – and accelerate the pace of economic transformation, unlock the potential of businesses, and drive much needed industrialization to create jobs.
A Guest Editorial