New energy for Africa: the Africa Renewable Energy Initiative (AREI)

Renewable energies in Africa. Photo: C.Kropke, Brot für die Welt

The climate summit in Paris last December not only adopted a new global agreement, but also launched a number of initiatives designed to make tangible contributions to climate protection in the short term. The Africa Renewable Energy Initiative (AREI), which is being supported by Germany among other countries, is particularly interesting in this respect. Its long-term goal is to provide all Africans access to modern and sustainable energy and to promote economic development in African countries on the basis of renewable energies. This initiative will once again be the focus of attention in a few days at the next UN climate summit in Morocco – one of the pioneering countries for renewable energy on the African continent. In this post, we aim to provide a brief overview of the current debate on the initiative and renewable energy in Africa.

AREI addresses an issue that is crucial for equitable sustainable development on a global basis, as the population of the African continent suffers from energy poverty. More than 620 million Africans have no access to electricity at all and rely on traditional biomass, i.e. firewood and charcoal, for cooking and heating. With around 160 gigawatts (GW), the entire continent has less installed power generation capacity than Germany alone. This shortage of power is also hampering economic development. Companies often have to fall back on costly diesel generators, and power outages complicate planning. Currently, the African power mix as a whole is still dominated by fossil fuels. However, investment in renewable energy has risen sharply in recent years and many African countries already have ambitious expansion goals for renewable energies and laws that put those goals within reach. In addition, there are already a number of policy initiatives and programs designed to promote renewable energy. These include the UN Sustainable Energy for All (SE4ALL) initiative or the African Clean Energy Corridor under the auspices of the International Renewable Energy Agency (IRENA). The Africa-EU Energy Partnership (AEEP) and many other programs by individual donors also focus on renewables.

What distinguishes AREI from these initiatives? Why another initiative?

AREI is different – in three respects. Firstly, unlike other initiatives and programs, AREI was developed by Africans and is led by African institutions. AREI is under a mandate of the African Union (AU). Its Governing Board is composed of representatives of various African institutions such as the Committee of African Heads of State and Governments on Climate Change (CAHOSCC), the African Ministerial Conference on the Environment (AMCEN) and the African Development Bank (AfDB). The initiative is thus more solidly anchored and linked to African policy priorities.

Secondly, AREI is more ambitious than many existing programs. AREI has set itself the challenging goal of building 300 GW of additional renewable power generation capacity by the year 2030. In the initial phase, at least 10 GW are slated to be in place by 2020. This is meant to ensure universal access to sufficient clean, suitable and affordable energy to all Africans and enable African states to pursue a development path beyond fossil fuels. However, AREI’s explicit objective is not to simply install renewable-energy power plants to replace fossil-fuel power plants. Rather, it aims to change the structure of the future African energy system, with more decentralized, small power plants that can also be deployed in remote rural areas. These are to be intelligently linked to large power plants near consumer centers.

Thirdly, AREI is not meant to replace existing programs and initiatives, but rather to improve the coordination of existing initiatives and promote targeted activities to close remaining gaps. AREI intends to provide a common framework and a common African vision. Provision has therefore been made to ensure that not only financial resources that have been earmarked specifically for AREI (via a new AfDB trust fund, for example), but also those flowing through existing programs and channels can contribute to the initiative.

A secretariat, the so-called Delivery Unit – which is administratively attached to the AfDB but operates independently – has been established to coordinate the initiative. The respected African climate expert Youba Sokona from Mali was tapped as its head. Five work areas are envisaged:

• in-depth inventory and analysis of existing programs and initiatives in the field of renewable energy in Africa
• strengthening the regulatory framework for investment in renewable energy
• capacity building for people and institutions at all levels
• financing and promotion
• project development and support

These five core work areas are complemented by a number of interdisciplinary topics such as the socio-economic and environmental evaluation of renewable energy technologies and a comprehensive multi-stakeholder dialog.

The financing structure of AREI

AREI requires around $5 billion to finance the preparatory phase, which will include analysis, evaluation and planning tasks. This is to be sourced primarily from international climate funds and from bilateral and multilateral donor institutions. A further $15 billion will be needed for the implementation of the planned 10 GW. However, these amounts are quite small compared to the $300-500 billion dollars that will be needed to implement the 300 GW target by 2030. Capital is therefore expected to come from a variety of source, both public and private. The Green Climate Fund (GCF) could play a key role in this regard. Private-sector financing should also be guided by AREI principles, under special consideration of environmental and social criteria. Furthermore, AREI does not rule out innovative sources of funding such as crowdsourcing.

A number of industrialized countries including Germany, France, the United States, the UK, Canada, Japan, Italy and Sweden, as well as the European Commission, made financial commitments totaling $10 billion during the Paris conference. Germany pledged $3 billion, making it the largest donor to the initiative.

However, it appears that the German contribution has been calculated to include the previously planned range of objectives in the renewable energy sector and in related areas such as energy policy and grids in Africa up to 2020. By contrast, the AREI founding document calls for “new and additional” funds. Aligning existing support to the criteria and priorities of AREI can still be quite appropriate, however. Yet the German government should create more transparency with regard to the makeup of the planned support for AREI and how it differs from the business-as-usual of the Germany’s long-term plans.

The success of AREI depends on its implementation

So far, AREI mainly consists of papers and pledges. Major development work such as clarifying the governance of the initiative, establishing the Delivery Unit and formulating criteria has been in progress in recent months. At this point, however, it will be important to start with the realization of concrete projects soon to ensure that the momentum of Paris is not lost. The current French Presidency of the UN climate change process recently published an initial list of projects. This is not an official AREI document, and it is important that the decisions as to which projects will be included in AREI are made by the African side on the basis of clear criteria, particularly with regard to social and environmental sustainability. The French list is an important step, however, because it permits a concrete discussion of what AREI should encompass. It is positive that the list includes a wide range of countries, technologies and project sizes and that it envisages improving the framework conditions, not just individual power plants. On the other hand, it also contains a highly problematic project, the Grand Inga Dam in DR Congo, which does not fit to the objectives of AREI at all. Things are thus open for discussion.

Independent civil-society observers will be needed to ensure that the AREI goals and criteria are taken seriously in the project selection. The ambitious transition to renewable energy that will benefit the people cannot be realized without the involvement of civil society. In a meeting of African NGOs in Berlin in February organized by Germanwatch, Brot für die Welt and African partners, it was agreed that the initiative should not be left to governments alone – neither those of the donors, nor African governments. In further meetings in Africa, the African Coalition for Sustainable Energy Access (ACSEA) was established, an organization in which NGOs can coordinate their activities to make AREI a success. At present, a position paper is being developed and the African NGO networks are surveying their members to get to know their perspectives and priorities for AREI.

AREI is an ambitious initiative, with founding documents that spell out the right principles for a development-friendly, socially acceptable and environmentally sound transition to renewable energy in Africa. The various actors – African governments, donors, the Delivery Unit and civil society – have become organized in recent months. Whether the initiative will be a success, however, remains to be seen during its implementation in the coming years.

Jens Klawitter and Lutz Weischer, Germanwatch