In­ter­view: There is en­ergy mo­men­tum in Africa

Africa Renewal - - Contents - — Kan­deh Yumkella

Un­der-Sec­re­tary-Gen­eral Kan­deh Yumkella is the spe­cial rep­re­sen­ta­tive of the UN sec­re­tary-gen­eral and chief ex­ec­u­tive for the Sus­tain­able En­ergy for All ini­tia­tive. His job is to mo­bi­lize global com­mit­ments and part­ner­ships to, among others, pro­mote clean en­ergy econ­omy and gen­er­ate jobs. Prior to his ap­point­ment, Mr. Yumkella had served as di­rec­tor­gen­eral of the UN In­dus­trial Devel­op­ment Or­ga­ni­za­tion. In an in­ter­view with Africa Re­newal’s Kings­ley Igho­bor, Mr. Yumkella dis­cusses a range of is­sues on Africa’s en­ergy chal­lenges.

Why should Africa pay at­ten­tion to en­ergy?

First, Africa is the most en­ergy-poor con­ti­nent. The en­ergy ca­pac­ity of 40 sub-Sa­ha­ran African coun­tries com­bined is less than the ca­pac­ity for the 20 mil­lion peo­ple in New York. Also, some African coun­tries such as Mali, Burk­ina Faso and others, be­cause they are Sa­he­lian and land­locked, pay more for a kilo­watt hour of en­ergy than the rest of the world. In some African coun­tries, it is be­tween 30 and 50 cents for a kilo­watt hour com­pared to 4 to 17 cents in most coun­tries in the world. Also, with­out ac­cess to en­ergy, our whole in­dus­tri­al­iza­tion and trans­for­ma­tion agenda is in jeop­ardy. If you take Nige­ria, Sierra Leone and many other African coun­tries, for ex­am­ple, ev­ery fac­tory or restau­rant has a gen­er­a­tor. It’s al­ready adding 20% to 30% to their cost of op­er­a­tion. Their fac­to­ries can­not be in­ter­na­tion­ally com­pet­i­tive.

How does Africa tackle its en­ergy chal­lenges?

First of all, we have to con­sider en­ergy as a ma­jor in­put to devel­op­ment. Sec­ond, we have to in­clude it in our plan­ning pro­cesses, par­tic­u­larly now that we are plan­ning 20 to 30 years ahead. Third, we must mo­bi­lize do­mes­tic and in­ter­na­tional re­sources to in­vest in the en­ergy sec­tor.

So what has changed so far?

For­tu­nately, I hear African lead­ers say­ing the right things about en­ergy now. From the prime min­is­ter of Ethiopia to the pres­i­dent of Ghana, it’s same mes­sage. If you take West Africa, for in­stance, most coun­tries are dis­cov­er­ing oil and gas. They must not do what Nige­ria has done: flare gas — burn­ing it for 50 years now, al­most $2 bil­lion to $3 bil­lion burnt ev­ery year. Mean­while, Nige­ria can­not gen­er­ate even 4,000 megawatts for its 170 mil­lion peo­ple. That should not hap­pen any­more in Africa. One of the ini­tia­tives we are pro­mot­ing now is zero flar­ing. But it’s not just zero flar­ing for its own sake; it’s how you use that gas to gen­er­ate en­ergy for your peo­ple. Ghana is one of the most elec­tri­fied coun­tries in West Africa—about 72%. But al­most 80% of the pop­u­la­tion still use char­coal and fire­wood for cook­ing.

How re­cep­tive are African gov­ern­ments to your ideas?

They are very re­cep­tive now. Tan­za­nia and Mozam­bique have as much gas as Kuwait. Pres­i­dent Kik­wete is very clear: they will use part of their gas to gen­er­ate power. He is go­ing to sell some of it. He will do down­stream pro­cess­ing for fer­til­iz­ers and for LPG [ liq­ue­fied petroleum gas] for cook­ing so­lu­tions. He will also in­vest in so­lar and wind be­cause he has those re­sources. Kenya wants to in­vest heav­ily in geo­ther­mal—heat from un­der­ground. The whole of East Africa—Rwanda, Ethiopia, Kenya—is sit­ting on geo­ther­mal, which is what has trans­formed Ice­land. I have met with Pres­i­dent Blaise Com­paore of Burk­ina Faso. His coun­try de­pends on Côte d’Ivoire for 40% of its elec­tric­ity. Pres­i­dent Macky Sall of Sene­gal is an en­ergy engi­neer. They all see the need for what we are talk­ing about.

But what prac­ti­cal steps are they tak­ing?

This is part of my job. How do I then motivate these lead­ers and help them or­ga­nize an in­te­grated en­ergy mar­ket? To get the in­vest­ments we need, gov­ern­ments need to for­mu­late en­ergy plans of at least 20 years, not ad hoc. We don’t plan as they do in other coun­tries, which is to project en­ergy needs over 20 to 30 years. You need a plan, an en­ergy pol­icy that gives con­fi­dence for in­vestors to say, ‘I will go and bor­row and in­vest, the laws will not change in the next five years.’ The good news is that a num­ber of banks are be­gin­ning to look at the en­ergy sec­tor. Aliko Dan­gote [Nige­rian busi­ness­man] and others just raised $3 bil­lion for a re­fin­ery in Nige­ria.

Ethiopia is col­lab­o­rat­ing with donors to con­struct a huge en­ergy in­fra­struc­ture. Is that an ex­am­ple for others?

Yes. The late Pres­i­dent Me­les Ze­nawi took a de­ci­sion to build the Re­nais­sance Dam. Let me tell you why I like the Ethiopian drive for the dam. They are rais­ing money through in­ter­nal taxes. They are look­ing to China and others to come as part­ners. They are say­ing ‘we are go­ing to sell half of the en­ergy to Kenya and other neigh­bours, like Su­dan.’ You need larger mar­kets for such big projects, and you need the trans­mis­sion lines that run across coun­tries.

Pres­i­dent Barack Obama’s en­ergy ini­tia­tive is ex­pected to plug into the African Devel­op­ment Bank’s sus­tain­able en­ergy fund, which is now a multi-donor fund. How far can this go?

Very far. It’s a $16 bil­lion project. What’s in­ter­est­ing is that it’s the model for my ini­tia­tive—how you use pub­lic money to lever­age pri­vate cap­i­tal. If you see Pres­i­dent Obama’s for­mula, it’s $7 bil­lion from govern­ment and $9 bil­lion from the pri­vate sec­tor. The good news is: some African play­ers are ready to in­vest. The Euro­pean Union has also given $400 mil­lion.

But Africa needs about $300 bil­lion for its en­ergy sec­tor.

We need a whole lot.

So the fig­ures we are talk­ing about are com­par­a­tively small?

Those big in­vest­ments you see are not char­ity. That is where the gov­ern­ments come in, to cre­ate those sta­ble mar­kets—

Part of our slo­gan is: we can do for the en­ergy sec­tor what we did for the mo­bile phones.

big­ger mar­kets of eco­nomics of scale, where an in­vestor says: ‘ Fine, I can bor­row a bil­lion [dol­lars] for 200 megawatts. I come in, I build the dam. The trans­mis­sion lines are there, the pub­lic pol­icy is in place, the power pur­chase agree­ment is there, I know the pric­ing, and I know that in 20 years I can get the money back and I can re­pay the banks.’ The amount of aid money that is go­ing to the en­ergy sec­tor is about $9 bil­lion. To achieve uni­ver­sal ac­cess to en­ergy for the 1.4 bil­lion peo­ple in the world who cur­rently have no ac­cess, we need $50 bil­lion a year. To go from $9 bil­lion a year to $50 bil­lion a year is a lot of work.

It looks like the chal­lenges are huge?

The sec­re­tary-gen­eral [Ban Ki-moon] says that en­ergy is cen­tral to any devel­op­ment process. Be­tween 60% and 70% of the green­house gases come from en­ergy pro­duc­tion and use. If you don’t deal with en­ergy, you can’t deal with cli­mate change, you can’t solve sus­tain­able devel­op­ment.

It looks to me that Africa can ac­tu­ally lead in en­ergy al­ter­na­tives.

I be­lieve so. We have the ad­van­tage to leap-frog. I al­ways give the ex­am­ple of mo­bile phones. I was in Nige­ria when they pri­va­tized mo­bile com­mu­ni­ca­tions. Be­fore then, there were about 400,000 or less tele­phone con­nec­tions. Within one or two years, the peo­ple had mil­lions of mo­bile phones. Part of our slo­gan is: we can do for the en­ergy sec­tor what we did for the mo­bile phones. What did we do for the mo­bile com­mu­ni­ca­tions? They had clear pub­lic poli­cies that all the in­vestors knew would last 20 to 30 years; they had clear in­vest­ment pro­tec­tion leg­is­la­tions in place; they un­bun­dled the sec­tor —pri­va­tised it. Our peo­ple can de­ploy so­lar, wind, re­new­able en­ergy, hy­dro and biomass.

Should the fo­cus be on sus­tain­able green en­ergy?

Our drive is to­wards low car­bon en­ergy sources. But, right now, it’s all en­ergy sources. Why should we burn gas? Why shouldn’t we use it for power gen­er­a­tion? Gas is less pol­lut­ing than coal—50% less. There is no rea­son why Nige­ria can­not be a gas pow­er­house. Nor­way, the sec­ond largest gas sup­plier in Europe, sixth largest oil pro­ducer in the world, wants to go 100% re­new­ables for elec­tric­ity in a few years. They are al­ready at 80%. Brazil is on its way to be­ing an en­ergy in­de­pen­dent coun­try. They have proven ethanol tech­nol­ogy. They have just dis­cov­ered huge de­posits of oil off their coast. Still they are push­ing re­new­ables heav­ily.

How soon do you think Africa can get to its en­ergy dream­land?

Noth­ing is im­pos­si­ble. I see this pos­si­ble within two decades. Sud­denly, Africa is grow­ing faster than ever be­fore. Sud­denly, many of us are dis­cov­er­ing more min­er­als than we ever thought we had. It’s about gov­er­nance; it’s about vi­sion and man­age­ment. I am op­ti­mistic. I see some mo­men­tum now. I see African busi­nesses and banks mo­bi­liz­ing their own cash. This is a pos­i­tive sign that we have not seen in the last two decades.

Photo: UN Photo/Maria Elisa Franco

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