Redesign clean energy funding, African Ministers demand

Mombasa County Transport and Infrastructure CEC Daniel Otieno Manyala, Mombasa County team and Kuza Eco Heat team at a walk during the Clean Energy Campaign long Moi Avenue in Mombasa County on Friday 26th January 2024. [FILE, Standard] A section of African ministers is urging a comprehensive review of how renewable energy projects on the continent are financed, citing rising debt levels and fears over increased foreign policy influence. They say Africa needs sustainable funding that fosters self-reliance, boosts economic growth, and balances public and private interests. Senior officials from Sierra Leone, Namibia, Ethiopia, and Ghana made their appeals during a high-level panel on Africa's energy transition at the 15th Assembly of the International Renewable Energy Agency (IRENA) in Abu Dhabi. They want new funding mechanisms that reduce debt distress and scale up clean power generation. They also seek more regional cooperation, improved regulatory frameworks, and greater involvement of local entrepreneurs. "Many African nations are under serious debt distress," said Dr. Kandeh Yumkellah, Chairman of Sierra Leone's Presidential Initiative on Climate Change, Renewable Energy & Food Security. "We must prioritise borrowing for productive investments, especially energy. But we must be careful about how much debt we take on. We still need loans, but they should leverage additional private money. And they must be structured so we can repay them." Yumkellah explained Sierra Leone's ongoing reforms. He noted that the United States is financing a gas power plant with over 100 megawatts of capacity to come online by 2028. The World Bank and International Finance Corporation (IFC) are also supporting an 80-megawatt solar project. He believes these efforts must move faster. "It's not enough. We need to triple the pace," he said. "Africa can be self-sufficient in power if we cooperate. Some countries have gas, others have hydro, and all of us have solar." Thomas Alweendo, Namibia's Minister of Mines and Energy, explained the difficulty of obtaining affordable financing. "Our policies are improving, but capital still hesitates," he said. "Many of our projects remain in the pipeline. Private investors want guarantees. Yet most African governments cannot provide them alone." He asked multilateral institutions like the World Bank to introduce more blended financing solutions. "We need to rethink how we fund climate action because this is an existential threat to humanity," he added. Some participants fear that external funders might push an agenda not always aligned with African priorities. Several ministers indicated that while foreign help is welcome, African leaders should be in the driver's seat. "When Africans set the vision and own the process, we get better results. We appreciate assistance but must lead our own projects," insisted Alweendo. Gosaye Mengistie, Senior Energy Advisor to Ethiopia's Minister of Water and Energy, pointed to Ethiopia's Grand Renaissance Dam, the largest hydro project in Africa at 6,000 megawatts. He said it is partly financed by local bonds and contributions from ordinary Ethiopians. "Ethiopia mobilised domestic resources to fund this massive dam," he noted. "Africa has capital. We must package viable projects and tap into local markets. That reduces dependence on costly external loans." Mengistie also explained the need to develop local manufacturing and supply chains. "If an inverter or a key component fails, we wait months for foreign shipments," he said. "Local manufacturing is crucial for reliability. More importantly, it creates jobs and opportunities for young people." Seth Agbeve Mahu, Director of Renewable Energy at Ghana's Ministry of Energy, said Ghana is taking practical steps. The country has an 89 percent electrification rate, one of the highest in sub-Saharan Africa. Still, connecting the final 11 percent in remote areas is challenging. "Off-grid solar and mini-grids are the logical solution," he explained. "We identified priority projects worth hundreds of millions of dollars. We need private capital plus concessional loans to deliver affordable electricity to rural communities." Mahu called for better procurement practices and a transparent regulatory environment. "We must avoid emergency power deals that push up tariffs," He said. "We need open tenders so competition lowers prices. We also need credible state utilities. They must have healthy balance sheets to sign bankable power-purchase agreements." Ministers across the panel agreed on the value of cross-border cooperation and integrated regional grids. They said that interconnections would allow power to flow from where it is most abundant to where it is needed most. "If we invest in large hydro in Sierra Leone or solar in Namibia, we should be able to trade that electricity freely within Africa," Yumkellah said. To involve youth in this transformation, Yumkellah mentioned Sierra Leone's task force on skills development. "Our ministries, with partners like GIZ and the EU, are training young entrepreneurs to serve the decentralized energy market," he said. "We plan 200 mini-grids. That means opportunities for thousands of technicians, installers, and service operators." "Africa may be starting from behind," Alweendo said, "but if we unite and reform how we fund, build, and regulate these projects, we will see transformative development in our lifetimes."

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