Africa searches for renewable energy billions—as China does big deal with Zimbabwe for good old coal

Western nations keen on financing clean energy, but as Zimbabwe deal shows, the continent's power needs are too immediate.

THE African Union, an alliance of 53 countries, has announced a plan to mobilise $20 billion to develop at least 10 gigawatts of renewable energy on the continent by the end of the decade.

The African Renewable Energy Initiative was announced Tuesday at the United Nations climate summit in Paris. It will be hosted by the Ivory Coast-based African Development Bank (AfDB), which will also act as a trustee, according to Alex Rugamba, director of energy, environment and climate change at the AfDB.

The programme is expected to be partially funded from the $100 billion pledged by rich countries to fight climate change in the developing world. The promise was made in Copenhagen in 2009 as wealthier countries with distant memories of their industrial revolutions, prodded emerging economies to choose green rather than cheap.

“The latest G-7 meeting in June resulted in a strong statement about the $100 billion for climate finance, so we think this could be one way,” said Rugamba in a phone interview. The funds would be used to attract and leverage private capital with a ratio of one to three or four, he said.

France said Tuesday it will pledge $2.2 billion to renewable energy projects through to 2020, a 50% increase on the previous five years. French funding will cover nearly a fifth of the the African plan, officials said.

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The financing was announced as President Francois Hollande hosted talks with African leaders at the COP21 climate talks near Paris. The meeting was focused on electrification, preventing desertification and rehabilitating Lake Chad.

“If there is no financing, there is no action in these areas,” Hollande said in opening comments at the meeting.  

Triple financing

The African Development Bank turned its focus to energy this year, seeking to bring electricity within a decade to the 620 million citizens on the continent who lack it. The institution funds both conventional and renewable power plants, and said it will triple its financing of climate action projects to $5 billion annually by 2020.

“We have enormous natural resources for clean energy in Africa,” Akinwumi Adesina, president of the African Development Bank, said in an October 25 interview. “We have the potential to deploy 11 terawatts of solar energy, 350 gigawatts of hydro, 110 gigawatts of wind and 15 gigawatts of geothermal.”

The initiative is likely to develop geothermal projects in East Africa’s Rift Valley, wind in North Africa such as in Egypt and hydropower across the continent, Rugamba said. It doesn’t have an established pipeline yet.

But amid the buzz around renewable energy China is set to provide a $1.2 billion loan to rehabilitate and expand Zimbabwe’s coal-fired Hwange power plant, highlighting the difficulties of getting developing countries to choose renewable but costlier fuels over cheaper but dirtier sources.

In news timed to coincide with Chinese president Xi Jinping’s arrival in the struggling southern African country, Finance minister Patrick Chinamasa said work on the plan would add 600MW to the creaking power supply, easing rationing.

“There are other power projects which are going to be funded by China,” Chinamasa said, citing licenses that have been granted to Makomo Resources Ltd., China Africa Sunlight Energy Ltd. and Per Lusulu Power. “Each will add 600 MW when complete,” he said, without specifying the finance the three projects would receive.

Defended coal funding

Zimbabwe rations power daily to consumers because it can’t meet average demand of 2,200 MW. Low water levels at its Kariba hydropower plant and ageing equipment at Hwange have cut production from an installed capacity of close to 1,800 MW to about half in recent years.

The AfDB in March defended its decision to continue financing power plants that use coal despite pressure from environmental groups and UN officials to shift more funds to clear energy.

“It is hypocritical for western governments who have funded their industrialisation using fossil fuels, providing their citizens with enough power, to say to African countries, ‘You cannot develop dams, you cannot develop coal, just rely on these very expensive renewables,’” former president Donald Kaberuka told journalists in London on Wednesday. “African countries will not listen.”

His successor, Adesina, has staked a major part of his legacy on eliminating the continent’s energy deficit by 2025, with in $55 billion in investment targeted for the “New Deal for Energy in Africa”.

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