Energy experts at PricewaterhouseCoopers (PwC) have said that African countries will need an estimated $2.8 trillion investment to transit from its current energy base and achieve the global net-zero emission target by 2050.
They stated this at the firm’s 2021 Africa Energy Review, saying that though transition to clean energy in the continent would result in loss of more than $15.2 trillion income source from fossil fuel, but an estimated five million jobs would be created in the process.
Speaking at the virtual event, Pedro Omontuemhen, PwC Africa Oil & Gas Industry Leader, said that investment in low-carbon energy systems in Africa lags global pace, adding that despite global climate finance commitments from developed economies aimed at $100 billion per annum, the allocation to Africa falls significantly short of what the continent requires to meet global targets.
“The fiscal constraints being experienced across Africa create a challenge for the continent to move with pace on its net-zero journey. Private partnerships, public-private partnerships (PPPs) and blended finance are becoming increasingly important and will need to be deployed together with strong public sector governance and innovative financing instruments to overcome these challenges,” he said.
James Mackay, PwC Director, Energy Strategy and Infrastructure, said:“Ensuring a sustainable planet is not a cost-benefit assessment, that said: Africa must carefully consider the economic impact of a transition away from fossil fuels and associated revenues in context of the affordable pace of development and growth of the renewable energy sector. More than a third of African nations are very dependent on fossil fuel commodities for state revenue, foreign currency reserves and local economic activity. An unfunded and rapid shutdown of this sector would place significant fiscal strain and hardship on Africa.
“On the other hand, too slow a transition may see Africa lag global markets and emissions reductions targets. Developed economies must play an active role in Africa to ensure a global win-win outcome”
On job creation, he said: “The adoption of renewable energy has the potential to boost employment opportunities on the continent with the creation of new skills and skills capacity. This employment creation is not limited to direct employment and of relevance to Africa is the potential boost in non-energy jobs through broader economic activity in rural communities where improved energy access through mini-grids and off-grid solutions will impact economic productivity.
“Overall, the energy transition in Africa has the potential to result in total renewable energy employment of around five million jobs by 2030, which is a substantial increase from the estimate of 324,000 currently employed.”