Last week, African heads of state and private sector representatives gathered in Nairobi, Kenya for the first-ever African climate summit. This meeting, organised ahead of COP 28, ended with the signing of the Nairobi Declaration, through which Africa has taken on continent-wide ambitions in the fight against climate change.
In this declaration, African countries call for the introduction of a global carbon emissions tax, which could be supplemented by a tax on international financial transactions. In addition, they are asking for debt service relief measures, which would involve extending maturities or a ten-year moratorium. They also call on multilateral donors to increase concessional funding for emerging countries.
For African countries currently facing a considerable increase in debt servicing, these financial support measures could be the driving force behind their energy transition, at a time when investments are struggling to take off. Indeed, according to the International Energy Agency, Africa only receives 3% of the world’s total investments in the energy sector; moreover, these have seen a continuous decline over the last few years, falling from USD 150 billion in 2014 to USD 90 billion in 2022. Investments in renewable energies, meanwhile, remained at around USD 30 billion per year, despite their worldwide growth and strong African potential. In particular, the continent is home to 60% of the world’s solar energy generation potential, but only 1% of the world’s installed capacity.
Given these investment delays, the challenge of the energy transition will be significant in Africa, a continent where more than 40% of its population did not yet have access to electricity in 2022. In the IEA’s report written jointly with the African Development Bank, the two institutions estimate that USD 200 billion of annual investment must be raised by 2030 for Africa to achieve universal access to electricity while meeting its climate objectives. Investment promises of USD 23 billion from the African climate summit last week are therefore only a first step in this direction. COP 28 in December will be an opportunity for Africa to present itself for the first time under the common banner of the Nairobi Declaration to make its voice heard better in the concert of nations.
