Africa’s renewable sector received $34.7bn in last decade

Africa's renewable energy sector has experienced a significant influx of investments in the last decade, totaling over $34.7 billion. Solar and wind energy have emerged as the most dominant sectors, with South Africa leading in both investment value and transaction volume. Andrew Jones, Partner and Head of Africa at Linklaters, shed light on the trends and impact of these investments in a recent interview with CNBC Africa. South Africa, with its successful Renewable Energy Independent Power Producer Procurement (REIPPP) program, has attracted nearly half of the total investments. The program, initiated by the government a decade ago, has facilitated the addition of approximately 7,000 megawatts to the country's energy grid. This accounts for about 17 billion of the total investment and involving around 95 deals. Other key African economies such as Egypt, Morocco, and Kenya have also witnessed substantial investments in their renewable energy sectors. Jones highlighted the broadening reach of renewable energy investments across the continent, with approximately 35 countries engaging in renewable energy deals over the past decade. While larger economies have focused on transitioning to cleaner energy sources, smaller countries have seen significant increases in power generation capacity through renewable projects. Localized grids and community-focused initiatives in countries like the Democratic Republic of Congo have further contributed to improved access to electricity. The societal impact of these investments is also a crucial aspect to consider. While investments in renewable energy align with environmental objectives by reducing harm to the environment, the ultimate goal is to enhance access to electricity for the continent's population. The $34.7 billion investment influx has indeed contributed to improving electrification rates across various African nations, with renewable energy projects playing a vital role in bridging the energy gap. Looking towards the future, Jones emphasized the favorable outlook for renewable energy investments in Africa. Unlike the early days of renewable energy adoption in Europe, where ideological motivations played a significant role, the shift towards renewable sources in Africa is primarily driven by economic factors. Many African countries rely on imported fossil fuels for power generation, leading to long-term financial burdens. Transitioning to renewable energy sources not only reduces this financial strain but also offers a more sustainable and economically viable solution, especially in regions with underdeveloped grid infrastructure. Renewable energy projects in Africa are scalable and adaptable to local needs, making them a practical choice for addressing energy challenges. The sector's attractiveness to investors is expected to continue growing, driven by the economic advantages, reduced dependency on imported fuels, and the flexibility of renewable energy solutions. With a focus on meeting sustainable development goals, the renewable energy sector in Africa is poised for further growth and impact in the coming years.