Potential clean energy investments in sub-Saharan Africa valued at $783bn up to 2030

The IFC said its study (140-page / 18 MB PDF), which looked at national climate-change commitments and underlying policies of 21 emerging-market economies following the “historic global agreement on climate change adopted in Paris last year, identified “sectors in each region where the potential for investment is greatest”.

In SSA, the study singled out Cote d’Ivoire, Kenya, Nigeria and South Africa’s as four ‘profile’ countries for clean energy investment potential in renewable energy generation, valued at $123bn, and buildings and transportation ($652bn).

The study said: “By 2030, the commercial investment potential in the construction of low-carbon buildings (in SSA) is estimated at nearly $153bn. Opportunities for investment in climate-smart agriculture projects across SSA are important in all of the four countries profiled, but currently no valid estimate exists for the size of this potential.”

According to the study, global warming in the range of three to four degrees Celsius would have “disastrous consequences for SSA, including heat extremes affecting the vast majority of the continent’s land area, heightened risks of extreme drought (particularly in southern Africa), crop failures and reduced yield, and flooding”.

In addition, by 2050, “almost 60% of people (800 million) in the region will live in cities, increasing demand for transport, building, and energy infrastructure”, the study said. This makes it “imperative to invest in resilient infrastructure, including water management (irrigation, hydropower, water supply, or flood control), roads, bridges, and other transport infrastructure”. These investments amount to an estimated $5bn to $10bn annually said the study, citing figures from the World Bank Africa Climate Plan.

The study said Cote d’Ivoire’s “estimated climate-smart investment potential for selected sectors is $9.6bn from 2016 to 2030”. Investment potential for constructing new “green buildings” in the country up to 2030 amounts to $5.7bn, the study said.

In Kenya, estimated climate-smart investment potential is $81bn up to 2030, according to the study. The IFC has estimated the investment potential for airports, seaports, railways, rapid light rail, roads and overall transport efficiency by 2020 “will be about $37bn over the next 15 years”.

Estimated climate-smart investment potential in Nigeria is more than $104bn in selected sectors up to 2030, the study said. “The country’s priorities include improving the power system, increased use of renewables, enforcement of energy efficiency and gas flaring controls, developing power plants at gas flare sites, implementing climate-smart agriculture, adopting green industrial technologies and implementing transportation reforms.”

South Africa tops the study’s estimates for climate-smart investment potential in SSA with a total of more than $588bn over the next 14 years. The IFC said South Africa is developing a tradeable carbon tax as a policy mechanism which, “when combined with electricity price adjustments, is expected to help bring renewable technologies in line with the cost of existing generation sources”.

IFC executive vice-president Philippe Le Houérou said: “There has never been a better time than now for climate-smart investing.” He said the report “reflects the dramatic reduction in the price of clean technologies and the rise of smart policies that are driving businesses to invest”.

The World Bank said in a report (192-page / 9.21 MB PDF) released last year that a “climate resilience project preparation facility” should be established in Africa to support plans for infrastructure investment, in addition to training programmes for planners and designers.

The head of the African Development Bank (AfDB) told the UN’s climate conference in Paris towards the end of last year the AfDB planned to triple its investments in renewable energy projects with the aim of creating 300 gigawatts of new electricity generating capacity in Africa by 2030.

AfDB president Akinwumi Adesina said the institution would be dedicating 40% of its resources to support the need for “massive financing for climate change mitigation and adaptation efforts” in Africa.