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Sustainable infrastructure could generate $1tn-worth of business opportunity, says report


Achieving sustainable development goals could generate business opportunities worth more than $1 trillion across Africa by 2030, according to a new report.

The report by the Business and Sustainable Development Commission (BSDC) (16-page / 870 KB PDF) said some of the biggest opportunities will come from working with private sector investors on shared infrastructure projects, the extractives sector and in expanding the deployment of renewable energy technologies, in support of the UN’s global sustainable development goals.

According to the Commission, which brings together international leaders from business, labour, financial institutions and civil society, “Africa is the continent where the potential for inclusive, green growth and development remains most untapped”.

The report highlights research conducted by the BSDC that shows “a compelling growth strategy for business leaders in Africa, one that opens up immense new market opportunities”.

Some of the “largest business opportunities in Africa”, which can address sustainability issues while tackling infrastructure challenges, include expanding renewable energy projects to “reduce the carbon intensity of electricity by increasing the share of renewables in the power sector”, the report said. This sector “creates a significant business opportunity” with a potential value of $29 billion by 2030.

In addition, a “substantial portion of extractive infrastructure such as railways and ports, as well as power infrastructure, could be shared” with a potential value of $72bn by 2030.

The report highlighted activities of the Kenya-based M-Kopa solar power company, which provides pay-as-you-go energy services to off-grid customers in East Africa by combining micropayment and mobile technology to enable leasing of solar power systems. “The company has connected more than 400,000 homes in Kenya, Uganda, and Tanzania to solar power with over 500 new homes being added every day, and aims to reach one million homes by the end of 2017,” the report said. “Current customers are projected to save $300 million over the next four years and enjoy 50m hours of kerosene-free lighting per month.”

Water and sanitation infrastructure projects could be worth a further $46bn by 2030 and this sector represents “a significant opportunity for private sector collaboration with governments to build and maintain this infrastructure”, the report said.

Risk pooling alone could yield $150bn worth of business opportunities, the report said.

However, the BSDC stressed sustainable development goals envisaged by the UN across Africa “will be delivered only with strong private sector engagement”. “Getting the right private sector and market development is key to driving sustainable growth.”

Last year, the World Bank Group’s International Finance Corporation launched ‘Scaling Solar’ to establish a “one-stop shop” for governments that want to attract private investors to build large-scale solar plants in sub-Saharan Africa and other regions, but lack the purchasing power of bigger emerging markets.

World Bank Africa acting chief economist and author of the bank’s Africa Pulse report, Punam Chuhan-Pole, said last year: “With external conditions likely to remain less favourable than in the past, African countries need to accelerate the pace of structural reforms aimed at boosting competitiveness and diversification.”

Chuhan-Pole said: “In most countries this will mean improving the business climate, reducing the cost of cross-border trade, reforming the energy sector to ensure affordable, reliable, and sustainable energy services, and making the financial sector more inclusive.”

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