Compared to industrialised nations, African countries emit far less greenhouse gases. Access to energy remains a key development obstacle for the continent. Some of the reasons for low energy related investment flows into Africa are currency instabilities, counterparty risks, weak institutions, low technical capacity, lack of transparency and accountability mechanisms as well as poor quality infrastructure.
Due to Africa’s abundant renewable energy resources and vast non-arable land, the continent offers significant potential. The whitepaper outlines Africa’s decarbonisation potential for investors, providing deep-dive analysis into the risks and opportunities in solar, wind and green hydrogen.
This report builds on our vast experience in advising African energy infrastructure investors and combines learnings from projects in all parts of the continent. With this study, we hope to contribute to the expansion of climate-related investment flows into Africa.
Key findings
- Unlocking Africa’s wind potential
The report shows that if Africa could exploit all of its wind resources for renewable energy generation, it could easily bridge the current energy provision gap on the continent. There is ample opportunity for greater investment and impactful infrastructure, with the International Finance Corporation estimating that Africa's wind potential is so substantial that it could meet electricity demand 250 times over. This highlights the immense capacity for sustainable energy generation that remains largely unexplored.
- Underinvestment in solar
Underinvestment has resulted in inadequate infrastructure and high costs in the solar sector. Africa’s current solar potential is estimated to be over 1000x the current solar power electricity generation capacity, yet it has only been systematically deployed in a handful of countries. This is indicative of the significant investment opportunity that exists – bolstered by the continent’s solar irradiation quality, yield, and abundance.
- The power of green hydrogen
Despite Africa having some of the greatest potential worldwide for producing hydrogen and ammonia from renewables at relatively low cost, the current use of low-carbon hydrogen on the continent today is minimal. Should existing commitments to reduce emissions be met by governments globally, it is projected that demand for green hydrogen projects will increase dramatically. Africa’s possession of copious renewable energy resources and vast arable land positions the continent uniquely well to produce green hydrogen and catalyse the broader process of industrialisation on the continent.
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