Energy infrastructure in the greater Horn of Africa has struggled to keep pace with a fast-growing population, creating a formidable hurdle for the region’s buoyant economies that can best be overcome through stronger deployment of energy efficiency and renewable technologies, according to a new IEA report.
Countries in the region have already demonstrated they can find innovative solutions to extend electricity access to underserved populations and have huge underexploited potential for wind and solar power. But achieving these objectives requires supportive policies, better regulatory frameworks, regional cooperation, and international financial assistance, according to the IEA’s new report on Clean Energy Transitions in the greater Horn of Africa, which is being presented at a conference in Kampala, Uganda.
Energy consumption
Energy consumption in the greater Horn of Africa – defined in the report as Djibouti, Eritrea, Ethiopia, Kenya, Somalia, South Sudan, Sudan, and Uganda – has grown by 3% per year over the last decade, but half the population still lacks access to electricity and only one in six people cooks with modern fuels.
The eight countries represent nearly a quarter of sub-Saharan Africa’s GDP, yet their total energy consumption is less than that of Belgium and the Netherlands combined – but with 10 times the population.
Growing economies
The greater Horn of Africa is home to some of the world’s fastest-growing economies
“The greater Horn of Africa is home to some of the world’s fastest-growing economies, but its potential is at risk if energy infrastructure can’t keep pace,” said Mary Burce Warlick, the IEA Deputy Executive Director.
“The IEA stands ready to provide expertise and policy advice for African countries to develop clean, reliable, and affordable energy systems that will serve all their people. These efforts will hinge on regional cooperation and international assistance.”
The keynote remarks
Ms. Warlick is providing the keynote remarks at the Kampala conference along with Ugandan Minister of Energy and Mineral Development Ruth Nankabirwa and Netherlands Vice Minister for International Cooperation Kitty Van Der Heijden.
All eight regional countries have sent representatives from their energy ministries, and other regional stakeholders are attending as well. Despite being one of the regions globally that is most vulnerable to the impacts of climate change, the greater Horn of Africa has one of the lowest levels of emissions per capita. In 2020, the region emitted about the same amount of carbon dioxide as New York City.
Bioenergy
Many of the region’s smaller countries, historically dependent on energy imports
Bioenergy – often in the form of gathered firewood, charcoal, and agricultural waste – currently meets around 80% of the greater Horn of Africa’s energy demand.
For electricity, the region has one of the world’s most sustainable systems, with more than 85% of generation coming from renewables – mostly in the form of large hydropower projects in Ethiopia, Sudan, and Kenya. But the region has massive, underutilized potential for solar, wind, and geothermal power. Many of the region’s smaller countries, historically dependent on energy imports, are installing their first large-scale renewables projects, such as the Juba solar PV farm in South Sudan or the Ghoubet Wind farm in Djibouti.
Access to electricity
Today, 140 million people in the greater Horn of Africa lack access to electricity – more than the population of Mexico. The situation has improved since 2010, with an average of 8 million people gaining access each year.
Kenya and Ethiopia lead the way, often thanks to innovative off-grid solutions: the two countries together accounted for 30% of solar home systems and solar appliance sales worldwide in 2021. Along with Uganda, they are also front-runners for mini-grid expansion. Somalia, a country without a national grid, has developed an active off-grid market, and Eritrea has reached near universal access in cities. However, progress in some countries has stagnated since the Covid-19 pandemic began, and the region now faces higher fuel import bills because of Russia’s invasion of Ukraine.
Improving the efficiency
The region needs to improve the investment environment and create a pipeline of bankable projects
Besides accelerating the rollout of renewables, the report says the greater Horn’s energy security and access would also benefit from improving the efficiency of buildings, cooking, cooling, and appliances, as well as greater adaptation of electric two- and three-wheelers.
The region needs to improve the investment environment and create a pipeline of bankable projects to attract the outside investment necessary to achieve universal energy access and support economic development. Cumbersome bureaucracy, a lack of clear planning, and limited technical expertise all contribute to the level of risk perceived by investors. Attracting more energy investment requires better leveraging of limited concessional public financing.
New sources
New sources of finance specific to clean energy can help. These include climate finance, carbon credits, renewable energy certificates, and sustainable or diaspora bonds, which would also help develop local capital markets.