How much investment is needed to realize the African Development Bank´s (AfDB) New Deal on Energy for Africa (the New Deal)? This is the overriding question that is thoroughly analyzed from the bottom-up for 54 countries in Africa, covering generation, inter-connectors, transmission and distribution (T&D), mini-grids and off-grid access options.
Underlying the analysis is an unprecedented collection of data, high-resolution regional power investment optimization and a tailor-made access expansion model for the continent.
The answer to this question is an average annual investment of 29-39 billion USD until 2025, depending on the continent’s ambition as to avoided greenhouse gas (GHG) emissions. In total, 230-310 billion USD is required until 2025, while an additional 190-215 billion USD is required for the period 2026-2030. The total average annual investment from 2018 to 2030 is estimated at 32-40 billion USD.
Achieving the New Deal’s Universal Access Vision
AfDB’s New Deal on Energy for Africa 2016-2025. The starting point for this analysis is the AfDB’s “aspirational vision to achieve universal access to electricity by 2025 – 100% access in urban areas and 95% access in rural areas.” The Strategy goes further in terms of establishing “strategic building blocks to achieve universal access”, which by 2025 include 130 million new grid connections and 75 million end-users benefiting from off-grid solutions.
If the New Deal’s aspirational vision is realized, it is estimated that about one billion Africans will gain access modern energy services by 2025. Such a rate of access expansion would be unprecedented for Africa and would require a major policy and financing push, as well as favorable macro-economic conditions. However, the analyses presented in this report confirms that an emerging “continuum” of access levels and decentralized power systems coupled with rapidly evolving business models, plummeting renewables costs and blossoming energy efficiency options likely means that the AfDB´s vision of universal access can be realized at a lower cost than previously expected.
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Source: Africa Energy Portal, AEP