WEST CHESTER, Pennsylvania — Limited access to energy has long stood in the way of African development. Recently, however, several African nations have begun developing solutions to their energy woes, thereby paving the way for a long-awaited march to modernity.
Most recently, Nigeria has begun to diversify its sources of electricity with an ambitious coal-to-energy project, funded by the African Development Bank, or AfDB. The project bucks the recent trend of waning support for coal-power initiatives.
From 2007 to 2013, public financing groups shelled out at least $55.7 billion for coal projects, according to the National Resources Defense Council. In October 2013, Angel Gurria, secretary general of the Organization for Economic Cooperation & Development, asked governments to reconsider their support for coal power.
Since then, some 36 groups, including Greenpeace, Oxfam, and the WWF, have campaigned to get export credit agencies to end their coal investments.
The World Bank and European Investment Bank, along with the governments of the U.K., Denmark, Finland, Norway and Sweden, responded, placing limits on lending for coal initiatives.
Environmental groups and United Nations officials alike have advocated that funding go instead toward more environmentally friendly energy sources, such as solar-powered LED lamps. However, others, including AfDB head Donald Kaberuka, have defended the right of African nations to invest in coal-based energy solutions.
“It is hypocritical for western governments who have funded their industrialization 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,’” Kaberuka said in March.
Jude Clemente, in a January Forbes article, offered similar sentiments, arguing, “those blocking energy options and projects in the developing world are ultimately blocking human development.” Clemente notes that coal-based power has helped drive up life expectancy in places like India, and is ideally suited for an urbanizing Africa.
According to the International Energy Agency, coal accounts for over 50 percent of on-grid power, which Clemente argues is more effective than off-grid solutions in alleviating poverty. According to Clemente, traditional grid electrification provides triple the power of off-grid solutions, at the same cost, along with more flexibility. The Center for Global Development notes that, “hooking up households to the grid in their immediate area could put a big dent into African energy poverty.”
While coal investment is controversial, it provides a cost-effective means of reducing poverty on a large scale. The AfDB is seeking to strike a balance between alleviating energy poverty, and maintaining its environmental integrity; however, this is easier said than done.
“To every single African country, from South Africa to the north, the biggest impediment to economic growth is energy, and we don’t have this kind of luxury of making this kind of choice,” Kaberuka said.
Last year, the AfDB mobilized lending $1.8 billion for energy related infrastructure, $350 million of which went to renewable energy.
– Parker Carroll
Sources: Forbes, Bloomberg Business