African alternatives are gaining traction in energy infrastructure investment.

Estimated read time 2 min read

Faced with major energy issues, African governments are becoming increasingly vocal not only about securing equitable access to development resources, but also about finding new solutions and quickly adopting policy measures.

According to Europa World, Sub-Saharan Africa is facing a variety of critical energy difficulties, the most of which are connected to limited generation capacity and an over-reliance on fossil fuels. Because of the region’s small, fragmented energy markets, electrical supply systems fail to discover economies of scale, and as a result, electricity is expensive (though frequently substantially subsidized).

The total electric generation capacity of the region (63 GW) is comparable to that of Spain. The region (excluding South Africa) has the world’s lowest per capita electricity consumption of 150 kWh, compared to a global average of 3,133 kWh.

Although there will be difficulties securing equitable access to the development of infrastructure, the African governments have in praise of what the adoption of the new policies will bring. Which are,

Energy Efficiency: Modern and efficient infrastructure reduces energy waste, leading to lower operational costs and decreased energy consumption.

Economic Growth: Infrastructure investments stimulate economic activity by creating jobs and supporting industries related to construction, manufacturing, and technology.

Along with becoming more vocal about equal access to development capital, African countries are innovating with their solutions and rapidly implementing policy supports such as energy efficiency and other regulatory reforms announced by South African President Cyril Ramaphosa in late July.

The foundations for an African single market are also being established through the African Continental Free Trade Area (AfCFTA), the world’s largest free trade area by number of countries (54). Once fully implemented, the AfCFTA will abolish tariffs on 90% of intra-regional trade flows and create a market of 1.2 billion people with a combined GDP of $3.4 trillion.

Environmental Impact: Renewable energy sources and advanced technologies can reduce greenhouse gas emissions, mitigating the effects of climate change and promoting sustainability.

Energy Security: Diversifying energy sources and enhancing grid resilience can improve a nation’s energy security, reducing dependence on imported energy and minimizing supply disruptions.

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