One of the primary outcomes of the Africa Energy Summit held in Dar Es Salaam at the end of January, was the launch of an initiative called Mission 300. Powered by a collaboration between the World Bank and the African Development Bank Group (AfDB), Mission 300 aims to connect 300 million people to electricity in Sub-Saharan Africa by 2030. The Summit’s outcomes included financial commitments of over $5 billion from the Rockerfeller Foundation and multilateral banks such as the Islamic Development Bank, the OPEC Fund, the Asia Infrastructure Investment Bank and Agence Française de Développement. Mission 300 is complemented by the Dar Es Salaam Declaration which commits to improving energy access and clean cooking solutions.
Africa’s Energy Gap
For decades, supply of energy on the continent, together with a growing population, has not been able to match demand. has not matched energy generation and usage. While the region has considerable renewable energy potential, it still grapples with low energy access and fossil-fuel intensive generation fleet. Africa accounts for just 6% of global energy use, with overall electricity access rates lower than global levels. The situation is particularly acute in rural Sub-Saharan Africa, home to over 57% of the continent’s population.
A lack of generation capacity is the largest driver of energy poverty. Climate change is making the situation worse particularly for hydroelectric plants., with droughts at the Kariba Dam leading to power cuts and an energy crisis that remains unresolved. Fossil-fuel reliant energy systems are facing problems of their own. Under-investment, aging infrastructure and vandalism have all contributed to a collapse of Nigeria’s national power grid.
A comprehensive and coordinated response is required, which is what Mission 300 seeks to achieve. At the summit, 13 African heads of state set targets for clean cooking solutions, renewable energy production, capacity building, access to energy for women and resource mobilisation. Twelve countries also presented their National Energy Compacts. Falling under the UN Energy Compacts, the compacts outline specific measures and timelines for expanding energy infrastructure and renewable energy, leveraging regional power integration and engaging the private sector. Multilateral institutions and foundations were also present at the Summit, with over $5 billion in pledges from the Islamic Development Bank, Asia Infrastructure Investment Bank, OPEC Fund, Rockerfeller Foundation and Agence Française de Développement. The World Bank fulfills its part of the funding through low-cost 40 year loans at 1% interest rate, with the AfDB
Natural Gas and fossil fuels
To succeed, Mission 300 must overcome historic implementation challenges. The project’s imperative is connecting people to the grid, which also means powering the grid in the most effective and least expensive way. For some, this necessitates a continued reliance and focus on fossil fuels, especially natural gas, and some of the initiatives supported by Mission 300 reflect this. Senegal’s National Energy Compact plans to use natural gas as a transitional fuel. With a national electricity access rate of 84% and reserves up to 35 to 40% trillion cubic feet, Senegal’s planned expansion of natural gas in its energy generation mix could make the country a regional energy powerhouse and global player in the liquefied natural gas (LNG) sector. But the use of gas as a bridge fuel has been met with skepticism, with critics pointing out that emissions from gas fuel the very climate crisis that is affecting energy infrastructure and production. Given the continent’s renewable energy potential, continued investment in fossil fuels does not fully overcome its historic energy system vulnerabilities. It also potentially locks the continent into stranded assets as demand for LNG is likely to shift in the decades to come.
Dean Bhekumuzi Bhebhe, the Senior Just Transitions Advisor at Power Shift Africa, argues that “even with financial support from the World Bank and AfDB, paying off loans borrowed to put up gas infrastructure could pose a significant financial burden to African economies. Relying on gas also undermines Africa’s commitment to climate resilience, considering the continent’s acute vulnerability to climate change induced extreme weather events.’’ Chibeze Ezekiel, the Executive Coordinator for the Strategic Youth Network for Development, does not support the Mission’s use of fossil fuels. ‘‘While providing access to electricity to some 300 million Africans by 2030 is commendable, we are concerned with the source or type of energy solutions to be adopted. We are in full support of cleaner and sustainable forms of energy sources which amount to significant co-benefits such as climate solutions, high potential for youth employment in Africa and environmental protection.”
Finance
Then there is the question of funding. Although the World Bank’s loans have a low interest rate, they still come at a cost. Government debt has increased in at least 40 countries, with 19 others at risk of debt distress, and the use of loans, however concessional, could add to existing debt burdens. Under loan agreements, African countries are often required to abide by often onerous and expensive conditionalities set by lenders on areas such as energy sources, project priorities, guarantees, and expected outcomes. Mission 300 CEO Andrew Herscowitz argues that a lack of reliable and affordable access to energy throttles economic growth and drives poverty, however loans on unfavorable conditions may only exacerbate this. The World Bank faced similar criticism when its loan programme to South Africa’s energy sector was met with condemnation from civil society organisations for burdening the country with unnecessary debt.
The role of the private sector is another factor. A 2020 research paper from the World Bank shows that while it has supported an increase in power generation capacity in developing countries, it comes with tradeoffs by often compromising stakeholder interests, influencing the market (especially with recent reversals in renewable energy investments from major energy companies) and potential impacts on the affordability of electricity. While Herscowitz has said that the Mission will be an African-led, will it be wholly African-owned? Alison Doig, the Clean Energy Campaign Manager for Recourse, argues that the private sector may end up influencing Africa’s energy development: “This Summit has opened the door to the global private sector to make profits from damaging mega projects such as fossil gas and big hydro, with much of the energy meant for export elsewhere.” Karabo Mokgonyana, Campaigner for Watt’s Up Afrika, said: “Its (Mission 300) success hinges on addressing critical challenges such as ensuring that energy is not only accessible but affordable and equitable as well, preventing private sector profit motives from sidelining social priorities and avoiding the exacerbation of Africa’s growing debt crisis.”
Mission 300 is an ambitious initiative that has the potential to transform energy access and generation in sub-Saharan Africa. However, in order to achieve its mission to connect 300 million Africans to clean and affordable energy, it needs to ensure that private sector and fossil fuel interests do not define its agenda. Key to ensuring this is transparency on the nature of the projects financed, the proposed terms of financing agreements and stakeholder engagement.
