SHIRLEY WEBBER | Africa has the means for successful just energy transition

One of the most emotive subjects in Africa is the energy transition from fossil fuels to cleaner energy, with the mining and resources sectors at the sharp end of the debate.

SA is light years ahead of the rest of the continent in terms of its energy infrastructure and renewable energy independent power producer programme (REIPPP) that has rolled out over 100 viable energy projects. This is undeniably a success story.

At the same time, businesses are coming to a standstill with five to 10 hours of power cuts. On top of that, we are facing real constraints within the transmission and distribution networks, indicating that the implementation of solutions is falling short and this needs to be rectified. The IRP 2019 by the department of mineral resources & energy and energy (DMRE) is being implemented, albeit slowly, and there are exciting new initiatives under way such as the energy storage and gas to power programmes.

Africa is seeing the potential for clean energy transition and making itself attractive to foreign investors who are key to funding the renewable drive and energy-changing market.

Which of the resource-rich countries are in the running for global capital to see their plans come online first?

While Egypt’s growth rate is expected to slow from 6.6% in 2022 to 3.4% in 2023, it compares favourably to SA, which the International Monetary Fund forecasts to grow at 0.1%. Egypt is expected to benefit from a number of investment pledges from the likes of the UAE, Saudi Arabia and Qatar.

Electricity supplied via renewables is expected to grow to 42% by 2035. There is also significant investment in a nuclear plant and green hydrogen project.

Mozambique is set to have the fastest growth in natural gas production in Africa over the next decade. This will create a strong foundation for gas-fired power projects that are in the pipeline.

Zambia is mineral rich and can expect to see significant investment in the coming years. The primary risk for Zambia is its significant reliance on hydropower, which has been vulnerable during rain and drought. Its rich resource base means that Zambia will attract foreign investment.

Ghana as a major exporter of gold, oil and cocoa comes with its own challenges with the Bank of Ghana forced to hold interest rates at elevated levels of around 29% while policymakers grapple with debt restructuring. Despite this, its solar market is already competitive and Ghana exports electricity to the rest of Africa – both of which can be attributed to policy reforms in the 1980s that drove IPP activity.

Tanzania is the third-largest producer of gold on the continent and that constitutes 50% of its exports. The country has been identified as a potential key player in the global graphite market. With demand for lithium iron ore batteries on the rise, graphite is a key component. To support this investment opportunity, the underdeveloped Tanzanian market is expected to add 6GW of renewable energy power by 2025.

Africa has the means to start implementing a successful just energy transition over the next decade. But, are there adequate resources and expertise to implement plans timeously? There are 54 countries in Africa and each of these come with their own unique energy challenges.

Absa is ready to identify hurdles and combine experience and expertise to create an enabling environment for the resource operators in all of Africa to succeed. When we get this right, this becomes a win-win for all stakeholders and a success story for the whole continent.

• Webber is coverage head: resources and energy at Absa CIB