UNDP on financing energy transition in Africa

The United Nations Development Programme is highlighting the urgent need for increased investment in the energy transition in Africa as part of the global effort to combat climate change. Achim Steiner, the administrator at UNDP, recently spoke with CNBC Africa about the challenges and opportunities facing African nations as they work towards decarbonizing their economies. Steiner emphasized the importance of leveraging decarbonization as a growth engine and development accelerator, rather than viewing it as a trade-off with short-term economic development pathways. He pointed out that having abundant natural resources like oil and gas does not guarantee equitable access to electricity for all citizens, highlighting the need for a transition to renewable energy sources. Several African countries, including Morocco and Kenya, have made significant progress in this area, with Kenya already close to achieving 90% renewable energy in its electricity generation. Steiner stressed the crucial role of clear regulatory frameworks, incentives, and leadership in driving successful energy transitions in African countries. He also called for increased international investment in renewable energy infrastructure to support Africa's clean energy development. However, he noted that many African nations are currently burdened by debt and lack sufficient access to financing for their energy transition efforts. Steiner highlighted the importance of co-investing with African countries to accelerate the transition to clean energy and emphasized the potential for international partnerships to drive progress in this area. The UNDP is working to de-risk investment environments for renewables, provide financing instruments, and promote systemic solutions like electric motorcycles in East Africa's transportation sector. Looking ahead, Steiner discussed the potential for carbon trading as a financial mechanism to support the energy transition in Africa. By participating in carbon trading, African countries could leverage their conservation efforts to reduce global carbon emissions and attract financial support for sustainable development projects. Steiner acknowledged the evolving nature of carbon markets and emphasized the need for transparency and accountability to ensure their effectiveness. Overall, he underscored the importance of unlocking alternative sources of financing to drive the energy transition in Africa and address the urgent challenges posed by climate change.