Global race to net zero emissions by 2050 is accelerating, but Nigeria and other African countries would need to invest an estimated $2.8 trillion in a clean energy mix and reduce its yeraly carbon-dioxide (CO2) emissions of 1.62m kilotons of CO2e.
Multinational professional services company PricewaterhouseCoopers (PwC) said investment in low-carbon energy systems in Africa lagged global pace.
It said despite global climate finance commitments from developed economies aimed at $100 billion yearly, the allocation to Africa falls significantly short of what the continent requires to meet global targets.
PwC stated that the fiscal constraints being experienced across Africa create a challenge for the continent to move with pace on its net-zero journey.
It, therefore, pointed out that private partnerships, public-private partnerships (PPPs) and blended finance are becoming important and will need to be deployed together with strong public sector governance and innovative financing instruments to overcome these challenges.
These were some of the key highlights from ‘PwC Africa Energy Review 2021’ released at the weekend. The review, which was accessed by The Nation, said with an acceleration of the global net-zero journey, there is increasing focus on developing countries and their lack of affordability to meet such net-zero targets.
Notwithstanding, PwC, in the review, said the majority of Africa’s 54 countries (35) have made commitments towards net-zero emissions, but at an estimated cost of $2.8 trillion just to transition Africa’s energy base by 2050. The required investment levels are unaffordable to most countries. This message has been given at COP-26 in Glasgow, through calls for increased international financial support from developed nations.
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The ongoing United Nations (UN) Climate Change Conference, also known as COP26, is the 26th UN Climate Change conference. Holding in Glasgow, Scotland, United Kingdom, it ends on November 12, 2021.
It was against this background that PwC’s review assessed Africa’s energy landscape, what the trends and patterns are across fossil fuels and renewables.The review outlines a double challenge for Africa of energy transition as well as addressing energy poverty, in line with the Sustainable Development Goals (SDGs).
It also looked at the scenarios that could play out in Africa’s energy transition and what the risk is of Africa being isolated from global markets and becoming “stranded”.
PwC Africa Oil and Gas Industry Leader, Pedro Omontuemhen, said: “The energy sector in Africa is diverse and characterised by different demands and needs in each country. While the energy journey for each country may be different, an overall perspective is needed on common issues in the bid to reduce the energy deficit on the continent.
“While the importance of global decarbonisation and a sustainable planet is foremost, the journey to achieve net zero is clearly highlighting the risk of further entrenching economic winners and losers.”
PwC has defined four potential scenarios that could materialise as Africa progresses the energy transition namely, assisted but rushed, collaborative and measured, business as usual, and stranded and strangled.
“All these scenarios are dependent on several factors, including the speed of global net-zero adoption; foreign funding available to Africa; and the level of Africa’s economic growth, which will include fossil fuel export revenue,” PwC said.
PwC Director: Energy Strategy and Infrastructure, James Mackay, said: “There is no doubt that the energy transition in Africa will be a complex journey with no single blueprint to solving Africa’s challenges.“Game Theory” outlines scenarios for decision making under uncertainty and how the outcome of individual participants depends on the actions of all.
“The global energy transition must prioritise the planet and all nations rather than identifying winners and losers. Africa will have no choice but to adapt to this new world, but to avoid a growing ‘fault line’ between the developed and the developing world, greater focus on equitable policy, markets and investment is clearly required.”