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The global climate emergency can no longer be
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ignored, especially not in Africa,
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where extreme weather events take a deadly toll
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on some of the world's most vulnerable communities.
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But as planet Earth seeks to decarbonize its energy,
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what is the situation in Africa?
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How is the continent driving the energy transition?
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Let's find out in the Blue Space.
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Hello, my name is Joanne Joseph and I'm your host here in the
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blue space presented by Standard Bank Corporate
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and Investment Banking.
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According to United Nations estimates,
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Africa accounts for less than 4% of global
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emissions.
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Yet,
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our continent suffers the worst effects of rising
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global temperatures.
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Africa is also rich in renewable energy potential.
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The UN estimates that our continent is home to
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30% of the mineral reserves that power renewable
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and low-carbon technologies.
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How can Africa, so rich in solar,
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wind and hydroelectric power potential,
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fuel the energy transition?
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And what role can or should investors play in making
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this happen?
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Joining me to talk about this are Dele Kuti,
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Global Head of Energy and Infrastructure at
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Standard Bank, NJ Ayuk,
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Executive Chairman of the Africa Energy Chamber and
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author of A Just Transition
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Making Energy Poverty History with an Energy Mix,
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and Sarah Collins,
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founder and owner of Wonderbag,
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an innovative non-electric slow cooker.
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Hello to you all.
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Welcome to the Blue Space.
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Lovely to be with you today.
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So I'm going to kick it off with you, NJ.
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I mean,
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there's a huge gap between Africa's energy
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potential and the reality of how long it's taking to
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get to the point where we can see ourselves exploiting that
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full potential.
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What explains that gap at this stage?
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There is a gap that exists,
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and that gap is access to finance.
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Because we're still dealing with an issue where you have
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600 million
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Africans without any access to electricity,
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900 million without any access to clean cooking
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technologies, most of them women.
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We have to close that gap between
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energy access and our ability to drive
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it up.
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Access to finance is key.
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And Africa has really been
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underfunded, underexplored,
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and a lot of projects without financing.
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but also a lot of financing without bankable
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projects.
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That is the gap that needs to be closed.
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So let me bring you in here, Dele,
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because if investment is needed,
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as NJ tells us,
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what's the investment case for putting money into renewal energy
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projects on this continent?
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No, thank you very much.
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And I think as NJ kind of mentioned,
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Africa today has a remarkable opportunity
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when it comes to Africa energy transition because of the
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abundance of resources available.
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And I'm speaking from solar.
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you know,
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wind and hydro as you did mention in terms of the
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abundance of that.
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You know, interestingly also, I mean,
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you require about 1.3 trillion dollars of
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investment to be able to support that in
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the continent.
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So, clearly,
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when you start thinking around energy transition and the demand that
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is there in the future,
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Africa is actually the place to be able to do that.
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Today, why is it this circumspect?
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The issue of energy security is now very important.
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I mean, we've seen the challenges that kind of come with the
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Russia and Ukraine crisis,
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with the fact that you're seeing things like oil and gas
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have some shift in terms of
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geopolitical situation that could impact that.
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So there's massive investment that could go into actually
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making sure that you can develop the energy where
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the resources are clearly present.
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As part of your opening also,
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you did mention about 40% of the mineral
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required to be able to meet energy
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transition is clearly there in Africa.
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So the investment case is there.
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And we at Standard Bank, we're actually pioneering that, you know,
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as part of the things that we're doing.
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We've put a policy in place where we're facilitating, you know,
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between 250 to 300 billion rand of
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investment into renewable energy.
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You know, we supported,
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you know, this, I mean, the last two years,
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we've actually facilitated close to 40 billion of investment that is in
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there,
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40 billion rand of investment into renewable energy.
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So the investment case is there from demand perspective,
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one opportunity to be able to do that.
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But I think, as NG mentioned,
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there's a clear need for reform in most of the
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continent.
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What kind of reform are we talking
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about?
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The challenge you have today is the fact that most of the sovereign
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continent today are clearly challenged.
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Why the success story in South Africa is because most of those early
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stage of cases were put in place,
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policy were put in place, transparency were put in place to be able to do that.
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But when you start going into the sub-Saharan African country,
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the sovereign is very weak in terms of the fact that, you know,
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technically most of them are bankrupt, you know,
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if you kind of think around from investment perspective when you start
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looking
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at the case.
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The cost of infrastructure to be able to get the right return
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in the continent is clear challenging
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because you need a lot of infrastructure to be able to do that.
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The return that, you know,
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investors would like to see in place in terms of,
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you know,
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the required investment return when you try to do those projects is quite
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important for the continent.
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As somebody who's been involved in Wonderbag so
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successfully for so many years, are you feeling that?
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that investment.
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on the ground?
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Jo, that's a really interesting question and you talk
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about successfully driving Wonderbag.
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It hasn't been successful for 15 years.
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We've been around for 15 years but the funding has not
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been available and the just
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energy transition,
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I'm talking about the 900 million women who
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don't have access to clean cooking solutions,
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an age-old technology which I developed called
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the Wonderbag.
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is changing the lives of millions of women
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across Africa.
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That's where we need investment.
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We need investment into the real people who are
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feeling climate change right now.
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The innovations belong in Africa.
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We have them.
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We don't need to look to Silicon Valley.
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We actually have that.
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What we need to do is re-look at how do we
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invest.
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The South African government introduced the carbon
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tax in 2019.
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That's the reason I have investment right now,
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because I have a business model that stacks up.
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So how, NJ, do we close that gap between Dele,
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who is providing financing at a very high level,
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and between the kind of women that Sarah is working
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with on the ground,
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who need to be a part of the just energy transition,
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but cannot necessarily access Dele directly?
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We need to create an enabling environment.
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This is an African struggle.
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This is what you have to really look at it from
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an African perspective.
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You're not going to get financing if you're the
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right regulatory environment.
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It's not there.
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I always say sign, baby, sign.
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It shouldn't take so long to approve a project
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than the time you need to build that project.
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You need to be able to drive up projects and you
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really need government to come in.
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What if we incentivize growth?
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What if we provided tax subsidies,
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tax incentives for entrepreneurs and
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financing,
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finance financiers look at that and say,
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these are shovel ready projects.
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These are bankable projects.
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We need to do that.
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Holding back on approvals,
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holding back on permits,
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going away from the ills of the past like mismanagement
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and corruption,
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that can really help drive that.
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But that's what we need to do because
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banks need that.
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entrepreneurs need that space for them to grow.
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And everyday people can just
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benefit from that because when you do that,
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you create jobs, you create opportunity,
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you create new revenue streams for
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government, more taxpayers,
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you're expanding your tax base,
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and you're just breathing hope into communities
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that felt or have felt shut down as
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nothing is there for them.
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Then you start seeing money coming in
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from...
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banks like Standard Bank and you start seeing other
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people bringing innovative solutions to really deal with
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Africa's problems.
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You know the issue of hope is an important one, Dele,
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and people will want to know that you have invested in some
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worthwhile renewable energy projects.
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Very briefly,
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your final thoughts on this and Standard Bank's role in this.
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I mean,
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Standard Bank is currently committed to driving energy transition of the
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continent and we've facilitated real investment into
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the market.
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In the last few years, we've actually depended
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deploy between 30 to 40 billion rand
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to support renewable projects, especially in South Africa,
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based on some of the big processes that have been put in place.
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In fact,
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we just recently closed battery
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projects and renewable projects in South Africa,
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where we actually support a client that actually generates renewable
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energy to be able to support a base-load energy provider
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into the continent.
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And we're not only doing that in South Africa,
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we're also doing that in other African countries.
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We supported a 300 megawatt project,
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the Lake Tokona project in Kenya.
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We're very keen to continue to do that as a bank.
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In fact,
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one of the things we've actually assigned ourselves to do that
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in the next two to three years,
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we actually want to facilitate between three to five gigawatt of power
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into the continent, because as NJ mentioned,
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Energy poverty is real in Africa.
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I want to make sure that we continue to drive that.
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And not only driving that at a large scale level,
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we also want to make sure that at least at a small
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scale level,
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we facilitate deployment of solar into
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various homes in the continent.
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We're happy to support various initiatives, you know,
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the likes of things that Wonderbatch is doing in the continent to be able to
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make sure that we drive energy not only at a
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high level basis,
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but also to kind of ensure that the community where this
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is required.
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in order to be able to accelerate growth in the continent where they
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are standing by to be able to support this initiative.
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What for you are the most promising
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opportunities for energy infrastructure development, NJ?
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It's about common sense.
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It's about pragmatism.
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It's about using whatever it
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takes for us to get out of an
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energy crisis that we are.
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Because actually, we are in an energy crisis.
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Can you imagine if you had in Europe or the
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United States where you have...
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Maybe two-thirds of the people
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with no electricity,
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CNN would be on it every day.
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But right now in Africa,
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where you have two-thirds of the people with no
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electricity, it's okay.
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That's normal.
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We don't have to normalize it.
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The arc of a moral universe is long,
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but it bends towards justice.
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But it doesn't bend by itself.
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It's what we do to drive it.
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Working with financial institutions.
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entrepreneurs,
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and then that's how we make it to move
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towards that just transition that we want to
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see.
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I'm going to leave it there.
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Delia, thank you so much for your insights.
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Sarah, NJ, lovely having all of you to discuss this.
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And of course, the conversation will continue here.
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Energy transition is a big topic.
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There's so much more we could talk about.
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We'll leave it there for now, though.
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And thank you to our guests.
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Thank you all for your insights.
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I'm Joanne Joseph.
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Thank you for watching.
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And until the next time we meet, take care.
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visit www.standardbank.com for
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slash cib to find out more about blue space
