On the 25^th October, the PEI held a
successful Africa Breakfast Club meeting focused on Financing Renewable Energy
in Africa: Challenges and Opportunities. Featuring a keynote presentation from
Yvonne Ike, Managing Director, Sub-Saharan (Ex-RSA), Bank of America Merrill
Lynch, our guests included African Heads of Mission, senior diplomats,
academics, and high-level representatives from the private sector.

First, Ms Ike provided a comprehensive overview of
Africa’s energy landscape, and the varied access to electricity across the
continent. She observed that there are currently 600 million people who lack
access to energy on the continent, and over 30 countries that experience
regular power outages. What’s more, over 700 million people are still using
traditional biomass fuels as a source of energy every day, which present
significant health and environmental issues. Due to population growth and
economic advancement, energy demand is expected to triple by 2030.

However, Ms Ike argued that Africa itself has many of the
solutions and high-quality renewable energy sources to address these
challenges. From biomass to solar and geothermal, she noted that Africa has
some of the best renewable energy sources in the world. In addition, due to
technological advances, the continent is in a unique position to leapfrog the
traditional centralised methods of delivering utility. This should help drive
down the cost and enhance the efficiency of implementing renewable energy over
time.

She also noted that traditional private sector investors
have been slow to embrace the renewable energy market due to concerns about
access to capital, high inflation, and the enabling environment. As a result,
governments need to create the regulatory framework and policies needed to incentivise
private investors to enter the market. Similarly, Ms Ike observed that local
governments should provide grants and concessional financing to create the
first layer of capital in an environment that can bring other sources of
funding in.

In the near future, Ms Ike expects to see a shift from
traditional investors entering the space to groups such as pension funds and
sovereign wealth funds prepared to invest over the long term. Green bonds are
an also important means of accelerating investment in renewable energy, as
these investors are not purely motivated by high financial returns, but have
factored environmental and social impact into their investment models. Finally,
Ms Ike called on stakeholders to work together to unlock the $55 billion per year
needed to address the continent’s energy needs until 2030. Policy and advocacy,
capacity building in financial institutions, and enhancing access to capital
markets will be essential in this endeavour.

The presentation led to a dynamic discussion among attendees
whose comments focused on access to technology, enhancing investment in
R&D, and crowdfunding to address energy needs. We were delighted to welcome
a range of African High Commissions in London, including distinguished
representatives from Senegal, Rwanda, Ghana, and Russia. Furthermore, the PEI
was grateful for the attendance of representatives from businesses including
IBM, Investec Asset Management, Emerging Africa Infrastructure Fund, and the
Royal Academy of Engineering (RAENG).

Thank you to the distinguished guests who attended and,
especially, the members of the PEI Partners Forum whose support makes these
events possible.