The world is far off-track to meet its shared goal of providing affordable, reliable and sustainable energy to all people by 2030. Indeed, the number of people without electricity access increased in 2022 for the first time in a decade, rising from 675 million in 2021 to 685 million the next year. Eighty percent of people without electricity access — and 18 of the 20 countries with the biggest energy access deficits — are in sub-Saharan Africa.
Closing sub-Saharan Africa’s massive energy access gap will require substantial investments; around $20 billion per year through 2030, according to the International Energy Agency’s (IEA) estimate. And China could play a key role in filling that need.
China is not only Africa’s largest bilateral trading partner and one of its biggest sources of foreign aid, but is also home to more than 80% of the world’s renewable energy manufacturing. This makes the country uniquely well positioned to support clean energy expansion and access in sub-Saharan Africa. Indeed, it’s already made strides in that direction. For example, China’s government financed the construction of a utility-scale 50 megawatt (MW) solar plant in Kenya — the first of its kind in the country. Since opening in 2019, the plant has supplied an average of over 100,000 MWH of electricity annually, enough to support more than 350,000 people in 70,000 households.
While China has also supported some smaller, localized renewable energy efforts in sub-Saharan Africa, most of its investments in the region have focused on this kind of utility-scale installation. The challenge is that large, centralized projects often struggle to meet the dispersed, small-scale electricity needs of rural communities — particularly in remote areas where energy access is scarce. The mismatch between scattered electricity demand and centralized energy supply has made it difficult to increase access where it’s needed most.
As China hosts the 2024 Summit of the Forum on China-Africa Cooperation (FOCAC) this September, closing electricity access gaps in sub-Saharan Africa must be top of the agenda.
About the Africa Solar Belt Program
Recently, China committed to shift its overseas renewable energy investments toward smaller-scale initiatives that prioritize social benefits. Its first major program under this new strategy — and a key initiative of the Forum on Africa-China Cooperation — is the Africa Solar Belt.
China’s Shift Toward International Clean Energy Investing
China has a long history of investing in energy infrastructure overseas. Its Belt and Road Initiative has invested over $1 trillion in infrastructure in more than 150 countries. In the past, these investments have been dominated by fossil fuel projects, particularly coal power. More recently, China has committed to ‘green’ its investments and development efforts in developing countries. For example, it established a “South-South Climate Cooperation Fund” in 2015, which seeks to help developing countries tackle climate change by supporting 10 pilot industrial parks, 100 climate mitigation and adaptation projects, and 1,000 climate-related capacity building activities (“10-100-1,000”). In 2021, China, along with 53 African countries and the African Union Commission (AUC), adopted the Declaration on China-Africa Cooperation on Combating Climate Change, stressing China’s commitments to increase clean energy investment in Africa and to end overseas investment in new coal power projects.
The Africa Solar Belt Program, which is supported by research and policy analysis from WRI, aims to provide CNY 100 million (around US$14 million) in public funds between 2024 and 2027 to supply 50,000 African households with solar home systems. It also aims to support interventions that can improve livelihoods of local populations, which could potentially include things like powering schools or healthcare with solar. China has promoted this as a shift to “small and beautiful” projects rather than its traditional utility-scale investments.
But while the Africa Solar Belt and similar programs could significantly expand electricity access and improve people’s welfare in sub-Saharan Africa, fulfilling this promise will require China and Africa to work together to overcome critical implementation challenges.
Key Challenges to Implementing the Africa Solar Belt Program
China and African partners have made some early progress in implementing the program. Since its launch in 2023, China has signed bilateral memorandums of understanding (MOUs) with two African countries: the Republic of Chad and the Democratic Republic of São Tomé and Príncipe. Together, the three countries’ governments have developed and adopted an implementation plan valued at 15 million CNY (around US$2.1 million), which aims to deliver 3,100 solar photovoltaic systems in São Tomé and Príncipe and 4,300 to local households in Chad by end of 2024.
However, past and ongoing energy access initiatives in the region — such as Lighting Africa, which is led by the World Bank and the International Finance Corporation, and Power Africa, a U.S.-led initiative — reveal numerous obstacles, risks and challenges. For example, financers and developers of decentralized renewable energy projects have had trouble identifying electricity demand at local, national and regional levels in Africa due to a lack of reliable data on viable opportunities. They have also found it difficult to develop sustainable and replicable business models for decentralized renewable energy projects that can attract private sector investment in the region at scale. Further, local work force in the region have faced challenges building the technical capacity needed to operate and maintain decentralized renewable energy over a multi-decade lifespan.
How China and Africa Can Work Together to Accelerate Solar Belt Implementation
China and Africa will need to work together closely to ensure China’s clean energy investment is directed where it can have the most positive impact. China will host the ninth Forum on China-Africa Cooperation from Sept. 4-Sept.6, 2024 to explore areas of economic collaboration, trade and investment, as well as development cooperation with Africa’s political leadership. At this summit and through other fora, it is critical that leaders from both areas explore interventions that could unlock new clean energy investments under the Africa Solar Belt Program and similar initiatives.
Here are five key steps that Chinese and African governments can take to help scale up Solar Belt implementation at this year’s FOCAC summit and beyond:
1) Facilitate more public and private investment in clean energy initiatives
With China’s shift away from investment in overseas coal-fired power plants, funding could be redirected to further deepen the country’s investment in sub-Saharan Africa’s distributed renewable energy sector. This will require a transition from traditional financing arrangements that worked in the context of utility-scale energy projects to new and innovative ones that respond to the needs of distributed renewable energy space.
Strategic collaborations between Chinese and Pan-African development finance institutions, philanthropic agencies, local banks, fund managers and research institutions will be critical to closing the region’s funding gap. Governments can facilitate this by developing policies and regulations to attract international investment to the region and reduce risks for investors.
2) Incubate business opportunities between China and private sector actors in sub-Saharan Africa
Distributed renewable energy is primarily needed in rural areas of sub-Saharan Africa, where local contexts, including terrain and cultural dynamics, will dictate how to successfully design and execute projects. Collaboration with local renewable energy companies is critical to implementing “small-and-beautiful” projects. Renewable energy associations from both areas — including the Chinese Renewable Energy Industries Association (CREIA) and its African counterparts, like the Kenya Renewable Energy Association (KEREA) — could play a strategic role in facilitating collaboration among their members and supporting pilot projects in selected African countries.
3) Encourage research, data analysis and knowledge exchange
Developers and investors alike need detailed information on the location and size of potential projects, the cost of such opportunities, their potential return on investment and more. Chinese renewable energy investors, their local counterparts and other investors must collaborate with local and international institutions that can provide reliable, granular data at both national and local levels to inform energy planning and investment decisions in the region. Tools like WRI’s Energy Access Explorer can help fill such gaps by pinpointing areas with viable renewable energy demand, whether for household electrification or for powering productive uses, such as agriculture and healthcare electrification.
4) Nurture and facilitate platforms for policy dialogues
Continuous policy dialogues at national, regional and international levels will play a crucial role in deploying distributed renewable energy throughout sub-Saharan Africa. Governments and project developers must cooperate with civil society organizations, think tanks, development banks and other partners to incorporate voices from the region into policy and regulatory discussions. Partnerships with demand-side policy makers to sensitize investors and developers on investment opportunities, as well as strengthening south-south collaboration and engagements at strategic global platforms to influence regional and international policy discourse on renewable energy investment, will be very important.
5) Facilitate capacity building and technology transfer between China and sub-Saharan Africa
Sub-Saharan Africa produces most of the critical minerals used in manufacturing renewable energy technologies globally. For example, Democratic Republic of Congo produces about 70% of the world’s supply of cobalt, a mineral essential to building the lithium-ion batteries used in electric vehicles. These minerals are exported in cheap, raw form to China and other countries, while the final manufactured technologies are imported back to Africa at a much higher cost. By facilitating technology transfer to sub-Saharan Africa, China could help strengthen the region’s manufacturing capacity and build local economies through job creation, while also contributing to GDP and reducing the cost of deploying renewable energy locally.
Chinese stakeholders, including policy makers, academic institutions, industrial associations and renewable energy manufacturers can help by: developing and executing training curriculum targeted at strengthening capacity of local workforces to meet the sector’s growing demand; identifying requirements needed to facilitate transfer of renewable energy technology; and building and certifying local workforce capacity for renewable energy deployment, maintenance and operation.
-350x250.jpg)