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African Energy Futures
Mafalda Duarte
African Development Bank
Outline
• Africa Today
• Global and Africa’s Income Inequality
• Global and Africa’s Environmental
Degradation
• Additional Challenges due to Climate Change
• How to Support Transformation
• What is needed
• Innovative finance
• Opportunities in the Post-Rio+20 Landscape
Africa Today:
Continued and robust growth…but mostly
driven by commodity prices
Africa Today:
Business climate is improving…but private
sector still faces bottlenecks
Africa Today:
Poverty is falling but unequally
Global Income Inequality
Substantial But Uneven Progress
1975
650
1995
600
550
GDP per Capita Index
1960=100
500
450
400
350
300
250
200
150
100
50
0
2010
Source: World Bank, World Development Indicators; OECD, DAC Statistics
2008
Bottom 25, 1960-2010
2006
2004
2002
2000
1998
1996
1994
1992
Top 25, 1960-2010
1990
1988
1986
1984
1982
1980
1978
1976
1974
1972
1970
1968
1966
1964
1962
1960
Average
Africa Today:
Massive infrastructure deficit
Africa Today:
Regional integration and intra-regional trade
needs deepening
Global Environmental Degradation
?
?
Source: Rockström et al., Nature (2009)
Additional Challenges
Due to
Climate Change
Pictures: AfDB
Impacts on water resources
•
Warming expected to increase up to
1.4 ° C by 2020; 5.1 ° C by 2080
•
Increase in temperature = greater
evapostranspiration; e.g. 1° C
warming results 10% reduction in
surface runoff (Morocco)
•
Changes in variability - more severe,
intense, prolonged droughts and
floods
•
Changes in groundwater recharge
•
By 2020, up to 250 million people in
Africa are projected to be exposed to
increased water stress
Impact on Agriculture
• Changes in pests, diseases,
growing seasons, land-use
• Temperature-induced crop yield
losses of up to 16% per 1° C
• Overall reductions of up to 22%
across 5 crops
• By 2020, yields from rain-fed
agriculture could be 50% less in
some countries, affecting food
security and exacerbating
malnutrition
Impact on Coastal Zone and Marine Resources
African Cities at Risk
• 19 big cities (1 million +) in
LECZ*
• Mombasa: 17% city below
0.3m
• Banjul: most below 1m
• Egypt: 2 million people
below 0.5m
• Abidjan, Lagos at high risk
Marine Resources at Risk
• 22 of 33 coastal countries
“highly vulnerable” to CC
impacts on fisheries are in
Africa
But Opportunities Too
How to Support
Transformation
Across Age
Inclusive
Growth
Across Gender
Across Geography
Building Resilience
Gradual
Transition to
Green Growth
Managing Natural Resources
Sustainable
Infrastructure
How to Support Transformation
Infrastructure development
$30-50 Billion Annual Gap
2% of Lost Annual
GDP Growth
• Improve transport & logistics chains
•
•
•
•
Meet rising demand for energy
Enhance water resources
Expand broadband telecommunications
Integrate urban infrastructure
How to Support Transformation
Regional integration
Only 12% of Africa’s Trade
is Intra-Regional
•
•
•
•
•
Hard infrastructure
Support soft infrastructure
Trade and Customs procedures
Movement of labor and capital
One stop border posts
How to Support Transformation
Private sector development
50 million MSMEs
22% Access to Finance
Low productivity
• Improve investment and business
climate
• Expand access to infrastructure
• Promote enterprise development
• Improve access to finance
• Scale up support to MSMEs
How to Support Transformation
Governance & accountability
20% live in fragile states
Weak institutions
Poor service delivery






Build accountability: public spending, delivery
Support anti-corruption initiatives
Strengthen debt-management capacity
Promote fiscal decentralization
Bolster property rights, access to justice
Improve natural resource management
How to Support Transformation
Skills & technology
250 million Africans
between 15 and 24
15 million new job
seekers annually
 Build skills: science, technology,
engineering
 Support women in technical & scientific
study
 Support innovation & entrepreneurship
 Develop networks of excellence and
mentoring programs
What is Needed
TAILORED STRATEGIES, POLICIES THAT
PROMOTE SMART BEHAVIOR AND TACKLE
UPFRONT CAPITAL CONSTRAINTS
Innovative Finance
• Focus on upfront financing:
– Need for new sources, but also project preparation finance and
risk-management schemes
– Borrowing constraints
– SMEs and local governments
• Green finance, but also:
– Leverage public and IFI resources: engage private banks; Fundof-funds; buy down interest rates
– Local public finance
– Payment for environmental services
Opportunities in the
Post-Rio+20 Landscape
• SDGs and the post-2015 int’l development agenda
– “Shared prosperity” and the challenge and imperative of
integrating sustainability into the poverty-centric MDG framework
• Natural Capital Accounting (NCA) + WAVES
– UN Statistical Commission adopted a System for EnvironmentalEconomic Accounts, and 60+ countries embraced NCA at Rio
• Data, tools and knowledge
– Clear demand from advanced and developing countries for
better information and methods and opportunities to share good
(and failed) practices
Targeting and Tailoring
Thank You!!
Mafalda Duarte
[email protected]