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Climate change

Unlocking Africa's Potential: Green Investment as a Key to Sustainable Growth

Strategic Insights

— 2 min read

Africa is a vast and developing continent that holds significant potential for green investment, which is crucial in mitigating climate impacts and promoting sustainable economic growth. According to Fitsum Assefa, Ethiopian Minister of Planning and Development, green investment is key to unlocking Africa's potential, as it has 60% of the world's best solar resources but accounts for only 1% of global solar capacity. With 85% of the continent's population under the age of 35, Africa's young demographics, abundant resources, and innovation make green investments among the most promising worldwide.

Key Takeaways:

  • Africa holds 60% of the world's best solar resources but accounts for only 1% of global solar capacity.
  • The continent receives just 3% of global energy investments, highlighting the need to attract more investors to the sector.
  • Ethiopia is an example of a country that has nearly entirely transitioned to renewable energy, with 95% of its national grid run by hydropower.
  • The Grand Ethiopian Renaissance Dam (GERD) is generating 2,350 MW and will reach 5,150 MW at full capacity, also supplying power to neighboring countries.
  • Renewable projects such as solar-powered green ammonia production in Kenya and the Jambur Solar Power Station in Gambia are significant contributions to the continent's green economy.
  • Financing remains the biggest challenge for Africa in mitigating climate impacts, as the continent receives less than 15% of climate funds, mostly in the form of loans.
  • Ethiopia's Green Legacy Initiative, which aims to plant billions of trees, is a significant program that stabilizes ecosystems and increases carbon absorption.
  • Electric mobility is emerging as a primary means of transportation in Ethiopia, with the country importing and distributing the most electric vehicles on the continent.
  • Investors are increasingly recognizing the importance of aligning their portfolios with their values and the long-term health of the planet, and expanding green investment is essential for unlocking Africa's potential.

Statistics:

  • Africa holds 60% of the world's best solar resources.
  • The continent accounts for only 1% of global solar capacity.
  • Africa receives just 3% of global energy investments.
  • The Grand Ethiopian Renaissance Dam (GERD) will generate 5,150 MW at full capacity.
  • Renewable projects such as solar-powered green ammonia production in Kenya and the Jambur Solar Power Station in Gambia are increasing renewable energy capacity on the continent.
  • Less than 15% of climate funds go to Africa, mostly in the form of loans.
  • Ethiopia's Green Legacy Initiative aims to plant billions of trees.
  • 85% of Africa's population is under the age of 35.

Sources:

  • Fitsum Assefa, Ethiopian Minister of Planning and Development, The Ethiopian Herald, September 2023.
  • James Murombedzi, Head of the African Climate Policy Center (ACPC) at the United Nations Economic Commission for Africa (UNECA), The Ethiopian Herald, September 2023.
  • The African Development Bank, cited in The Ethiopian Herald, September 2023.

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