Africa
USD 5 Billion Deal Signed for Establishment of Africa Energy Bank
African Export-Import Bank (Afreximbank) and the Africa Petroleum Producers’ Organisation (APPO) recently made history by signing the Establishment Agreement and the Charter of the Africa Energy Bank (AEB). The AEB is designed as an independent and supranational pan-African energy development bank, starting with an initial capital of USD 5 billion. This milestone concludes two years of negotiations and preparations since the signing of a Memorandum of Understanding in May 2022, aiming to establish the AEB.
The AEB’s primary objective is to address the imminent void caused by the withdrawal of funding for oil and gas projects in Africa by traditional financiers. With over 125 billion barrels of proven crude oil reserves and over 600 trillion cubic feet of proven gas reserves, Africa needs to tap into these resources to produce energy as it currently has the largest proportion of the world’s population living without access to modern energy. While the AEB’s focus will be on funding oil and gas projects, it remains open to renewable energy initiatives. The AEB aims to harness all forms of energy to eradicate Africa’s energy poverty. Although initiated by Africa, shareholding is open to all investors who align with the mission and vision of the Bank.
Source: Afreximbank
Africa
COMESA, World Bank Launch USD 5 Billion Energy Programme
COMESA and the World Bank have today launched a USD 5 Billion energy programme dubbed the Accelerating Sustainable and Clean Energy Access Transformation (ASCENT) programme. ASCENT is aimed at accelerating energy access efforts in the eastern and southern African region, with a target delivery of new electricity connections for 100 million people. The program’s objective, to which participating countries and regional institutions will contribute, is to increase access to sustainable and clean energy in Eastern and Southern African countries.
ASCENT will leverage the proposed International Development Association (IDA) envelope of USD 5 billion to signal the World Bank’s commitment to achieving SDG7 in the Eastern and Southern Africa region and mobilise an additional USD 10 billion from development partners, governments, national utilities, private-sector and commercial funders, carbon markets, climate and other impact-oriented financiers, and philanthropic and other partners. The Multiphase Programmatic Approach is IDA financed and anticipates that up to 20 countries in the Eastern and Southern Africa (AFE) region will participate in ASCENT. IDA-eligible countries can be financed from the USD 5 billion ASCENT envelope. In addition, IBRD countries with energy access deficits may participate in the Program through IBRD borrowing, and to access climate finance, carbon financing platforms and the private-sector dialogue.
Source: COMESA
East Africa
East Africa Set to Lead Africa’s Growth
The budding East Africa has been projected to grow higher than anticipated in 2024. The region is on pace to lead other sub-regions in Africa as the fastest-growing region. This is despite its inflation which was the highest in Africa at 26.5 percent in 2023, with Sudan leading the way at 245.3 percent, and a war that ravaged its newest member Sudan.
A recent report by the African Development Bank revealed that despite numerous challenges facing East Africa, the region is expected to grow 3 times more than the previous year. The report notes that East Africa’s economy is set to grow at 4.9 percent, more than double the 1.5 percent growth rate seen the previous year. “East Africa is expected to maintain its position as Africa’s fastest-growing region, with real GDP growth rising from an estimated 1.5 percent in 2023 to 4.9 percent in 2024 and 5.7 percent in 2025,” the report states.
Source: Business Insider Africa
Angola
Angola, China Sign Agreement to Develop USD 1.6 Billion Industrial Park
A Chinese-invested industrial park in Angola is expected to create a comprehensive industry chain covering alumina preparation, aluminium electrolysis and aluminium product manufacturing, significantly boosting the national industry and aiding economic diversification, a senior official recently said. Huatong Aluminum Industrial Park project, promoted by a consortium of Hebei Huatong Wire and Cables Group and Huatong Angola Industry, will be executed in five phases, with an investment of 1.6 billion U.S. dollars, said Secretary of State for Industry Carlos Rodrigues, at the groundbreaking ceremony in Barra do Dande in the country’s northeastern province of Bengo.
“This significant investment undoubtedly marks another milestone in the economic cooperation agenda between Angola and China,” he said, adding that the project is expected to generate 12,000 jobs. During the ceremony, Chinese Ambassador to Angola Zhang Bin said such investments will advance Angola’s economic diversification and industrialisation, create more jobs and tax revenue, and help train local technical talent. The industrial park will be completed in five phases over eight to 10 years. The first phase, with an investment of 250 million dollars and an annual production capacity of 120,000 tons of electrolytic aluminium, is expected to be operational by the second half of 2025.
Source: Xinhua
Morocco
Morocco to Build USD 1.3 Billion Electric Battery Gigafactory
The Sino-European group GOTION High-Tech, with Volkswagen as a key shareholder, is slated to build the first electric battery gigafactory in the Middle East and Africa. The state-of-the-art facility, to be located in Kenitra, Morocco, represents a USD 1.3 billion investment and promises to generate 17,000 jobs. The announcement was made during a signing ceremony in Rabat on June 6th, presided over by Prime Minister Aziz Akhannouch. The strategic investment agreement, endorsed by high-ranking Moroccan officials and GOTION High-Tech executives, signifies the beginning of a comprehensive industrial ecosystem for electric battery production in Morocco.
“This project is a monumental step for Morocco, positioning us at the forefront of the electric mobility revolution in the region,” announced Prime Minister Akhannouch. “It underscores the confidence international investors have in our nation’s potential.” The Kenitra gigafactory will have an initial production capacity of 20 GWh, with plans to expand to 100 GWh and a total investment of USD 6.8 billion. This initial phase alone will create 17,000 jobs, including 2,300 highly skilled positions, marking a significant boost to Morocco’s labor market and technical expertise. GOTION High-Tech’s choice of Morocco highlights the country’s growing appeal as a strategic investment hub, especially in industries with high value-added potential.
Source: Morocco World News
Ghana
Ghana Launches Largest Floating Photovoltaic (PV) Project in West Africa
Ghana has installed a massive solar photovoltaic power system at the Bui Reservoir, reducing land use and boosting renewable energy production. The project can also protect aquatic life from overheating. Ghana is now home to the largest floating solar PV system in West Africa. It is part of a hybrid plant that uses solar and hydraulic resources to generate and supply energy to the national grid. The installation of 5 megawatts of the Bui generating station, in the Bono region, deploys photovoltaic modules in hydraulic infrastructure, preserving the soil and avoiding the felling of trees. Its engineers say the panels also create a healthy environment for fish spawning below, promoting fry production and supporting aquatic ecosystems.
Despite some environmental concerns, the country has argued that this project would help the environment by reducing the use of fossil fuels and help the West African Gold Coast achieve its objective of generating 10 percent of its power from renewables by 2030.
Source: Business Insider Africa
Nigeria
FG Signs USD 3.5 Billion Deal with Afrexim to Promote Textile, CNG Vehicles
The Federal Government recently announced a USD 3.5 billion agreement with the African Export–Import Bank (Afreximbank) to enhance the textile industry and promote the use of compressed natural gas (CNG) vehicles among other initiatives.
The Minister of Industry, Trade and Investment, Doris Uzoka-Anite, disclosed in a statement on X recently. Uzoka-Anite said the deal was signed with the international financial institution during the 31st Afreximbank Annual Meeting in Nassau, The Bahamas. Speaking further, Uzoka-Anite highlighted that the collaboration with Afreximbank is poised to transform Nigeria’s industrial landscape, create jobs, and drive sustainable economic growth. She emphasised that the deal signifies a pathway toward a brighter and more prosperous Nigeria. The potential of the collaboration with Afreximbank points to its capacity to reshape the industrial landscape by fostering innovation and expanding employment opportunities in the country.
Source: The Guardian
South Africa
State Corporation Aims for 2 GW of Clean Energy by 2026
South African state-owned power utility Eskom recently announced plans to develop up to 2 GW of renewable energy capacity by 2026 as the country aims to increase energy availability. The utility also aims to return more than 2.5 GW to the national grid by March 2025 while accelerating the implementation of projects under the country’s Just Energy Transition. According to Eskom Group Chief Executive Dan Marokane, the utility plans to repurpose and repower existing coal-fired power stations through the deployment of renewable energy and storage projects at or close to the stations.
This plan comprises up to 50 projects with a capacity of over 2 GW and aims to provide alternative job opportunities for those working at coal stations. The projects include a mix of solar, wind and hydropower facilities, all of which are currently being evaluated and awaiting ministerial approval. Meanwhile, the utility recently announced that the National Transmission Company of South Africa – is on track to start operations by July 2024. The company was established as part of an unbundling initiative, which aims to separate key functions of Eskom to improve operational efficiency. Additionally, Eskom is looking at creating a dedicated generation company within 24 to 36 months as part of the unbundling process.
Source: Energy, Capital & Power
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Reports
Africa Economic Outlook | Africa Development Bank
Despite strong economic performance and remarkable resilience, structural transformation in Africa has been slow and uneven, and addressing this will require calling bold reforms of the global financial architecture to meet Africa’s development financing needs.
The African Economic Outlook 2024 was published as African countries continue to contend with significant structural challenges and multiple severe shocks, including heightened food and energy prices driven by geopolitical tensions such as Russia’s invasion of Ukraine, climate issues affecting agriculture and energy production, and persistent political instability. This challenging environment has led to a slowdown in Africa’s real GDP growth, which dropped to 3.1 percent in 2023 from 4.1 percent in 2022. Looking forward, however, the economic outlook is more positive, with growth expected to increase to 3.7 percent in 2024 and 4.3 percent in 2025, highlighting the strong resilience of African economies. This growth rebound will be underpinned by expected improvements in global economic conditions and effective policy measures. With these outturns, Africa will remain the second-fastest growing region globally, with 40 countries set to achieve post higher growth rates relative to 2023 levels.
Click here to read and download the full report.
World Investment Report | UNCTAD
Global foreign direct investment (FDI) fell by 2 percent to USD 1.3 trillion in 2023 amid an economic slowdown and rising geopolitical tensions, according to the World Investment Report 2024. However, the report highlights that the decline exceeds 10 percent when excluding the large swings in investment flows in a few European conduit economies. The downturn in project finance affected sustainable development, with new funding for Sustainable Development Goals (SDGs) sectors dropping over 10 percent, particularly in agrifood and water.
This hampers efforts to achieve the 2030 Agenda and calls for urgent policy action to revamp sustainable development finance. The report emphasises that business facilitation and digital government solutions can address low investment by creating a transparent and streamlined environment. It highlights significant growth in online services and information portals, saying such tools also support broader digital government development, mostly benefiting developing nations.
Click here to read and download the full report.
Greening the implementation of the African Continental Free Trade Area Agreement | United Nations Economic Commission for Africa
The African Continental Free Trade Area (AfCFTA) Agreement aims to create a single market for goods and services, increase intra-Africa trade and promote sustainable socioeconomic development in Africa. African countries need to balance efforts to address these goals with the urgency of climate change. As of the 27th session of the Conference of Parties of the United Nations Framework Convention on Climate Change in 2022, most African countries had submitted their Nationally Determined Contributions (NDCs) to mitigate the impact of climate change. Establishing a carbon market is now on the policy agenda.
This analysis uses a dynamic general equilibrium model with different sources of energy (including renewable energy) and an in-depth presentation of greenhouse gas emissions to assess the economic and environmental impacts of implementing the AfCFTA Agreement and adopting various climate policies in Africa, including those NDCs and the International Monetary Fund’s proposal of carbon price floors. It shows that implementing the agreement and achieving Africa’s climate objectives are compatible. Continental coordination of emissions reduction among African countries proves most efficient for climate action.
Click here to read and download the full report.
Clean Energy Investment for Development in Africa | International Energy Agency
At the inaugural Africa Climate Summit in Nairobi, Kenya, in 2023, African heads of state and government re-emphasised the economic development priorities outlined in Agenda 2063, the continent’s strategic framework to deliver on its goal for inclusive and sustainable development. The declaration calls on the international community to support its goal to increase Africa’s renewable generation capacity from 56 gigawatts (GW) in 2022 to at least 300 GW by 2030 – an even more ambitious goal than the global pledge to triple renewable energy capacity agreed upon at the 2023 United Nations Climate Change Conference – both to address energy poverty and increase the supply of cost-effective clean energy for industry.
This report aims to inform the G7 initiative by providing an overview of the energy-related investments needed to achieve all African energy and climate-related goals, including universal energy access and its nationally determined contributions, by 2030. It then explores how clean energy projects can best be financed, focusing on three key investment pillars: household access to modern energy; the electricity sector; and emerging industries.
