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06 Jun 2022

World Economic Forum Regional Action Group for Africa Financing the Future of Energy

future of energy

Globally, there has been a significant drive to reduce carbon emissions, specifically from energy-generating activities which, according to the Intergovernmental Panel on Climate Change are estimated to contribute to 70% of global greenhouse gas emissions1. The Kyoto Protocol mechanisms and Paris Agreement on climate change have made significant steps in providing awareness and targets and securing commitment
from member countries to reduce emissions and combat climate change. For many developed countries, effort and funding can be prioritized towards accelerated decarbonization as their financial, technical,
infrastructural and institutional resources are stronger and low-risk funding is easily accessible given their advanced economies.

For less developed countries, the inverse is the case. Due to stagnating economies and focus on other developmental mandates, there is limited focus on decarbonization and dealing with the impact of
climate change. Although the climatic impacts in Africa make the continent extremely vulnerable, this must be considered in the context of its developmental and economic mandate for growth; the continent aims to close the gaps within multiple development indicators. The first goal is to boost economic prosperity and growth, typically from a low GDP base relative to global averages (28 countries are classified as low-income). This is critical to increase standards of living and socio-economic stability in the region. These growth ambitions are currently hindered by a lack of universal energy access, with an estimated 54% of people living in Africa still without access to electricity. This is largely driven by insufficient generation capacity and transmission network reach, as well as inability to afford offgrid and mini-grid alternatives2. Even with access limitations in most sub-Saharan African countries, there has been significant progress in others such as South Africa where universal access has been almost achieved.

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