Energy

Lack of access to electricity and modern energy sources profoundly limits economic development, constrains people’s life chances and traps millions in extreme poverty.

The Challenge

Around 16% of the world’s population, about 1.2 billion people, have no access to electricity. Lack of electricity in Africa remains one of the biggest barriers to the region’s development and prosperity, and continues to trap millions of people in extreme poverty. Sub-Saharan Africa accounts for 13% of the world’s population, but only 4% of its energy demand.Thirty seven countries in sub-Saharan Africa have a national electrification rate of below 50%. As a result, quality of life is severely diminished, resulting in needless deaths and stifled economic growth. In 2012, of the 915 million people living in sub-Saharan Africa, nearly 730 million people in sub-Saharan Africa heat their homes and cook using traditional fuels like wood and dung. Inhalation of the smoke and fumes produced from burning traditional fuels results in over four million deaths per year, mainly among women and children. That’s more deaths than from malaria and HIV/AIDS combined.

With a third of all health centres and primary schools lacking any access to electricity, that means that 90 million students and 255 million patients are left being educated and receiving healthcare from places that have no power. Nearly 60% of refrigerators used in health clinics in Africa have unreliable electricity, compromising the safe storage of vaccines and medicines. Hospitals are sometimes forced to operate with no lighting or power for equipment, putting people’s lives at serious risk. Children without domestic lighting struggle to do their homework in the evening, which negatively impacts their education and hampers their ability to fulfil their potential.

Countries with electrification rates of less than 80% of the population consistently suffer from reduced GDP per capita. Without access to reliable electricity from the grid, many businesses must run diesel generators to keep their operations functioning. Pulling energy from a generator costs somewhere between three and six times what electricity from the grid costs world-wide. Businesses cannot grow, neither can new jobs be created or critical services provided, without affordable and reliable access to lighting and power.

Rates of progress for expanding electricity access are good, but not nearly sufficient enough. Nearly one billion people in sub-Saharan Africa are projected to gain access to electricity by 2040, but because of rapid population growth, 530 million people living mainly in rural areas will remain without electricity access. Population growth rates are far exceeding electrification rates, so that while the number of people with access to electricity is increasing, the number of people without access is increasing at a faster rate.

The Opportunity

Political prioritisation and increased investment can change this. Some countries have demonstrated how this can be done. Thailand increased the share of the population with access to electricity from just 25% to almost 100% in just over a decade. The same can be done in Africa. Improved governance, strong economic growth on the continent, and technological advancements in the energy sector, combined with increased political prioritisation by African leaders, means there are increasing opportunities to scale up electricity and modern energy access on the continent.
Political momentum is building. Recognising the importance of energy for sustainable development, the United Nations (UN) designated 2012 as the International Year of Sustainable Energy for All and 2014 marked the start of the Decade of Sustainable Energy for All. An accompanying initiative that brings together business, governments, investors, community groups and academia in support of transformational efforts to secure universal modern energy access by 2030 has also been created. Twenty-six African countries used this Sustainable Energy for All initiative to publicly register the importance of increasing modern energy access for economic growth and poverty alleviation, and are now developing plans with supportive policy environments to address their countries’ modern energy need.

President Obama launched the Power Africa initiative in June 2013. This private sector – led initiative is aimed at doubling electricity access in sub-Saharan Africa. Power Africa’s initial goal was to add more than 10,000 megawatts of new, cleaner electricity generation capacity and to increase electricity access by at least 20 million household and business connections. At the Africa Leaders’ Summit in August 2014, President Obama announced a tripling of these goals to add more than 30,000 megawatts of new generation capacity and to increase access by 60 million new connections across the African continent. Since its inception, Power Africa has brought to financial close over 5,500 MW of new power (more than 50% of the original goal of 10,000 MW), and 2,000 MW of these MW are already online. Because of this more than 15 million people have gained electricity access since 2013. Power Africa’s initial $7 billion commitment has mobilised $54 billion in financing commitments from more than 130 public and private partners, more than half of which are U.S. companies. aIt is building on Africa’s enormous power potential, including oil, gas, geothermal, hydro, wind, and solar energy through investments from the Export-Import Bank, the Overseas Private Investment Corporation, the Millennium Challenge Corporation, and USAID in partnership with the private sector.

After two years of lobbying and advocating for its passage in both houses of the U.S. Congress, President Obama signed the Electrify Africa Act into law on February 8, 2016. This law will ensure that supporting electrification efforts in Africa remains a development priority of the U.S. government, and will help sub-Saharan African countries to modernise their power infrastructure and increase their access to electricity.

The lack of electricity and modern energy access profoundly limits a country’s economic development, constrains people’s life chances, disproportionately affects women, and traps millions in extreme poverty. Tackling the lack of electricity access will be one of the biggest challenges for all African countries over the coming decades; it will also be one of the biggest opportunities to finally alleviate extreme poverty. It is now time to seize this opportunity.