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Africa requires $203b investment in clean energy to meet 2030 climate goals – Report

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By Hameed Muritala

To meet 2030 climate goals as set out in the Paris Agreement, Africa needs an estimated 203 billion US dollars investments in clean energy, a new report by the International Energy Agency (IEA) and International Finance Corporation (IFC) has revealed.

Titled “Scaling Up Private Finance for Clean Energy in Emerging and Developing Economies (EDMEs)”, the report which was released in June, 2023, examines how to scale up private finance for clean energy transitions by quantifying the investments required in different regions and sectors to build modern, clean energy systems, including achieving universal access.

The report stated that Africa’s annual investment in clean energy in the public and private sectors needs a 534 percent upscale from the current average annual investment of 32 billion USD to 203 billion USD by 2030.

Source: iea.org

At the global level, the report disclosed that annual clean energy investments in emerging and developing economies will need to more than triple from USD 770 billion in 2022 to as much as USD 2.8 trillion by the early 2030s to meet rising energy needs and align with the climate goals set out in the Paris Agreement.

According to the report, a massive scaling up of investment is essential in emerging and developing economies to sustainably meet rising demand for energy, as well as to ensure that climate targets are met. “Getting on track for net zero emissions by 2050 will require clean energy spending in emerging and developing economies to more than triple by 2030 – far beyond the capacity of public financing alone and therefore demanding an unprecedented mobilization of private capital.”

The IEA Executive Director, Fatih Birol said “Today’s energy world is moving fast, but there is a major risk of many countries around the world being left behind. Investment is the key to ensuring they can benefit from the new global energy economy that is emerging rapidly.

“The investment needs go well beyond the capacity of public financing alone, making it urgent to rapidly scale up much greater private financing for clean energy projects in emerging and developing economies.

“As this report shows, this offers many advantages and opportunities – including expanded energy access, job creation, growing industries, improved energy security and a sustainable future for all.

The report stressed the need for greater international technical, regulatory and financial support to unlock the potential for clean energy in emerging and developing economies (EMDEs).

“By strengthening regulatory frameworks, energy institutions and infrastructure, and improving access to finance, this support can help governments overcome obstacles that deter clean energy investments today, including relatively high upfront costs and a high cost of capital,” the report submitted.

“The battle against climate change will be won in emerging and developing economies where the potential for clean energy is strong but the level of investments is far below where it should be. To address the pressing energy demands and emissions reduction goals in EMDEs, we need to mobilise private capital at speed and scale and urgently develop more investable projects,” said IFC Managing Director Makhtar Diop.

“This report is a call to action and offers a clear roadmap on what is needed to meet both climate and energy goals.”

Click here to read the full  report.

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