High costs have put off most investors from buying into the continent’s plentiful clean-energy reserves
3 min
Energy investment in Africa needs to more than double by the end of the decade if the continent is to meet its energy and climate goals. However, high costs are putting off much-needed investment in the region’s plentiful clean-energy resources and huge reserves of critical minerals, the International Energy Agency said.
“African countries have huge energy potential, including a spectacular range and quality of renewable-energy resources,” said Fatih Birol, executive director of the Paris-based agency in a report published jointly with the African Development Bank on Wednesday. “But these riches are largely untapped and they will remain so without greatly improved access to capital.”
Africa is home to more than half of the world’s best solar resources as well as possessing great potential for hydroelectric and wind-power projects, according to the IEA. It is also uniquely placed to contribute to industries behind the transition away from fossil fuels. It accounts for 80% of the world’s platinum reserves, half of all cobalt reserves, and 40% of manganese reserves, all of which are expected to be crucial to technologies such as autocatalysts and electric batteries, the agency said.
The report’s figures also pose a challenge for the West and the U.S. in particular, which is seeking to secure diverse sources of critical materials. In recent years, the West has lost clout in Africa as China has become the continent’s largest trading partner and fourth largest investor. Much of China’s investment in Africa goes toward energy projects and the nation’s lead in renewable technologies will likely see it grow as a funder of African renewable energy projects, the IEA said.
“Energy investment on our continent has fallen short,” wrote William Ruto, president of Kenya, in the report’s foreword. “It is imperative we take bold steps to more than double energy investment here in the next decade, with a primary focus on clean energy.”
From around $90 billion today, annual spending on Africa’s energy needs must more than double to $200 billion by 2030, two-thirds of which will need to go toward clean energy projects, the report said.
Despite the investment goal—which the IEA says will allow African nations to meet their agreed climate targets as laid out in the Paris Agreement and achieve universal access to modern energy systems—energy spending in Africa has been falling over the past five years as investment in fossil fuels has declined and spending on renewable energy projects has flatlined. The continent makes up just 3% of global energy spending.
The indebtedness of many African nations is holding back public spending on energy projects while private investors are reluctant to invest because of a prevalence of fragile states, absent regulations and perceptions of political or reputational risks.
All of these are pushing up the cost of capital which makes many African energy projects financially unviable despite ample local resources and proven technologies such as wind or solar power, the report said.
The cost of capital for a large-scale renewable energy project in Africa is up to three times higher than in advanced economies and China, the IEA said. For smaller projects, which will be crucial in rural areas, the costs are even higher.
Concessional financing—in which lenders such as international development banks offer developing nations more generous terms such as lower interest rates or longer repayment periods—will be crucial to overcoming those obstacles, the IEA said.
The IEA estimates that only half of electricity grid projects in Africa are commercially viable without such assistance, while most clean cooking projects would be unaffordable.
Despite accounting for 20% of the global population, investment in African energy projects is far too small, leaving much of the continent lacking basic access to electricity or clean cooking fuels, the IEA said.
Currently, 600 million people across Africa lack access to electricity and almost one billion have no access to clean cooking fuels.
$25 billion a year alone would be enough to provide basic access to electricity and clean cooking fuels to all Africans, equivalent to the cost of installing one LNG terminal, something European nations have done in record time following Russia’s invasion of Ukraine.
The report came as African leaders met in Nairobi for the third and final day of the Africa Climate Summit, which has seen calls for debt relief for African nations facing the effects of climate change and hundreds of millions of dollars pledged to Africa’s nascent carbon credits initiative.
African nations are seeking redress for the effects of climate change they experience despite contributing little to carbon emissions, the main driver of global warming. The continent accounts for around 2% to 3% of global carbon emissions but is particularly exposed to extreme weather.
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What a quarter-million dollars gets you in the western capital.
Alexandre de Betak and his wife are focusing on their most personal project yet.
4 min
As Paris makes its final preparations for the Olympic games, its residents are busy with their own—packing their suitcases, confirming their reservations, and getting out of town.
Worried about the hordes of crowds and overall chaos the Olympics could bring, Parisians are fleeing the city in droves and inundating resort cities around the country. Hotels and holiday rentals in some of France’s most popular vacation destinations—from the French Riviera in the south to the beaches of Normandy in the north—say they are expecting massive crowds this year in advance of the Olympics. The games will run from July 26-Aug. 1.
“It’s already a major holiday season for us, and beyond that, we have the Olympics,” says Stéphane Personeni, general manager of the Lily of the Valley hotel in Saint Tropez. “People began booking early this year.”
Personeni’s hotel typically has no issues filling its rooms each summer—by May of each year, the luxury hotel typically finds itself completely booked out for the months of July and August. But this year, the 53-room hotel began filling up for summer reservations in February.
“We told our regular guests that everything—hotels, apartments, villas—are going to be hard to find this summer,” Personeni says. His neighbours around Saint Tropez say they’re similarly booked up.
As of March, the online marketplace Gens de Confiance (“Trusted People”), saw a 50% increase in reservations from Parisians seeking vacation rentals outside the capital during the Olympics.
Already, August is a popular vacation time for the French. With a minimum of five weeks of vacation mandated by law, many decide to take the entire month off, renting out villas in beachside destinations for longer periods.
But beyond the typical August travel, the Olympics are having a real impact, says Bertille Marchal, a spokesperson for Gens de Confiance.
“We’ve seen nearly three times more reservations for the dates of the Olympics than the following two weeks,” Marchal says. “The increase is definitely linked to the Olympic Games.”
According to the site, the most sought-out vacation destinations are Morbihan and Loire-Atlantique, a seaside region in the northwest; le Var, a coastal area within the southeast of France along the Côte d’Azur; and the island of Corsica in the Mediterranean.
Meanwhile, the Olympics haven’t necessarily been a boon to foreign tourism in the country. Many tourists who might have otherwise come to France are avoiding it this year in favour of other European capitals. In Paris, demand for stays at high-end hotels has collapsed, with bookings down 50% in July compared to last year, according to UMIH Prestige, which represents hotels charging at least €800 ($865) a night for rooms.
Earlier this year, high-end restaurants and concierges said the Olympics might even be an opportunity to score a hard-get-seat at the city’s fine dining.
In the Occitanie region in southwest France, the overall number of reservations this summer hasn’t changed much from last year, says Vincent Gare, president of the regional tourism committee there.
“But looking further at the numbers, we do see an increase in the clientele coming from the Paris region,” Gare told Le Figaro, noting that the increase in reservations has fallen directly on the dates of the Olympic games.
Michel Barré, a retiree living in Paris’s Le Marais neighbourhood, is one of those opting for the beach rather than the opening ceremony. In January, he booked a stay in Normandy for two weeks.
“Even though it’s a major European capital, Paris is still a small city—it’s a massive effort to host all of these events,” Barré says. “The Olympics are going to be a mess.”
More than anything, he just wants some calm after an event-filled summer in Paris, which just before the Olympics experienced the drama of a snap election called by Macron.
“It’s been a hectic summer here,” he says.
Parisians—Barré included—feel that the city, by over-catering to its tourists, is driving out many residents.
Parts of the Seine—usually one of the most popular summertime hangout spots —have been closed off for weeks as the city installs bleachers and Olympics signage. In certain neighbourhoods, residents will need to scan a QR code with police to access their own apartments. And from the Olympics to Sept. 8, Paris is nearly doubling the price of transit tickets from €2.15 to €4 per ride.
The city’s clear willingness to capitalise on its tourists has motivated some residents to do the same. In March, the number of active Airbnb listings in Paris reached an all-time high as hosts rushed to list their apartments. Listings grew 40% from the same time last year, according to the company.
With their regular clients taking off, Parisian restaurants and merchants are complaining that business is down.
“Are there any Parisians left in Paris?” Alaine Fontaine, president of the restaurant industry association, told the radio station Franceinfo on Sunday. “For the last three weeks, there haven’t been any here.”
Still, for all the talk of those leaving, there are plenty who have decided to stick around.
Jay Swanson, an American expat and YouTuber, can’t imagine leaving during the Olympics—he secured his tickets to see ping pong and volleyball last year. He’s also less concerned about the crowds and road closures than others, having just put together a series of videos explaining how to navigate Paris during the games.
“It’s been 100 years since the Games came to Paris; when else will we get a chance to host the world like this?” Swanson says. “So many Parisians are leaving and tourism is down, so not only will it be quiet but the only people left will be here for a party.”
