By External Source
JOHANNESBURG, South Africa, Nov 18 2019 (IPS)

The Presidents Cyril Ramaphosa of South Africa, Paul Kagame of Rwanda, Nana Akufo-Addo of Ghana and Prime Minister Agostinho do Rosario of Mozambique engaged in a discussion titled, Invest in Africa’s Space: Conversation with African Heads of State, moderated by Dr. Victor Oladokun, African Development Bank Group Director of External Relations and Communications, at the Africa Investment Forum, Johannesburg, 11 November 2019.

President Cyril Ramaphosa identified infrastructure, energy, manufacturing and tourism as the sectors where the most investment opportunities exist in South Africa.

Rwanda’s President Paul Kagama said his country has created a conducive investment environment through good governance systems and security, and according to the World Bank, it is the second easiest African country with which to do business.

For Ghana’s President. Nana Akufo-Addo, the Africa Continental Free Trade Area remains a priority. He says his government is working to strengthen the country’s macro-economy. The country’s current priorities are infrastructure, agriculture and mineral resources.

Prime Minister Agostinho do Rosario representing the President of Mozambique, said his government is open to investment, fighting corruption and has improved transparency.

Kenya’s Lake Turkana Wind Power project opened in July is generates 300 MW of wind power. Credit: Isaiah Esipisu/IPS

By Nalisha Adams
JOHANNESBURG, South Africa, Nov 11 2019 (IPS)

Africa, where close to half of its 1.2 billion people have access to electricity, is set to become a world leader in renewable energy. As global business and development leaders met in Johannesburg, South Africa, to attend the Africa Investment Forum (AIF), held Nov. 11 to 13, one of the key focuses of the deals being discussed was around sustainable, renewable energy.

Organised by the African Development Bank (AfDB) and its various partners, the forum is expected to see $67 billion in deals closed over the next few days.

Leaders are doing all they can to encourage investment

In attendance where heads of state from South Africa, Ghana, Rwanda and Mozambique. At an invitation-only discussion among the leaders, Rwanda’s President Paul Kagame said there was a lot of progress in Africa as a whole.

“I have always thought it was Africa’s time. We African’s have let ourselves down, we are now realising it has always been our time. And we are now seize every opportunity and be where we should be by now,” Kagame said.

• Kagame was the driver of the African Continental Free Trade Agreement (AfCFTA) during his time as chair of the African Union in 2018. The agreement had not been in existence during the first AIF last year.
• Established in March 2019, the AfCFTA has now been signed by 54 of the 55 African member states.

Alain Ebobisse, CEO of Africa 50, the Pan-African infrastructure investment platform capitalised by the AfDB, said that there was a consensus from African leaders that they needed to do whatever they could to attract more private investment. He said that the AIF attendance showed that there was a changing narrative for investment on the continent.

• Earlier figures had been revealed by the South African premier of Gauteng Province, David Makhura, that over 2,000 delegates were in attendance from 109 countries. Of this, only 40 percent where from Africa with the majority of investors attending from Asia, Europe and the Americas.
• Gauteng is South Africa’s wealthiest province and includes the financial centres of Johannesburg and Sandton, as well as the seat of government in Pretoria. 

Renewable energy on a positive trajectory   

Ebobisse said that a lot was already happening on the continent and while the media focused on the challenges there were huge success stories too — like the 1.5 GW Benban Solar Park in Egypt, which is the world’s largest solar photovoltaic plant.

“I’m sure that people are not talking enough about this major achievement which is the Benban Solar Programmer, 1.5 GW of solar that was invested mostly by the private sector in a record time,” he said.

• Africa 50 invested in 400 MW in that project and completed it from design to commercial operations in two and a half years.

Ebobisse went on to highlight Kenya’s opening this July of the Lake Turkana Wind Power project, which at a generation capacity of 300 MW makes it the largest wind power project on the continent.

“It was funded by the private sector,” Ebobisse told the media. He also looked towards Senegal which was implementing many independent power producers or IPPs in the solar sector.

“So there is a lot that is happening. We need to also widely understand the challenges and understand what is happening on the ground. And people are actually making good money in this investment. And there is nothing wrong about that. Let’s celebrate those successes,” he said.

African Development Bank President Akinwumi Adesina said today the bank had doubled its investment in climate finance from $12 billion to $25 billion by 2020. Credit: Nalisha Adams/IPS

Making Africa a world leader in renewables

A few weeks ago, the Governors of the AfDB met in Cote d’Ivoire’s capital Abidjan, approving a historic $115 billion increase to the bank’s authorised capital base to $208 billion. “This is the highest capital increase in the history of the bank since its establishment in 1964,” AfDB president Akinwumi Adesina said today.

During the October announcement Adesina had said that a significant portion of funding would be invested in climate change.

Today, in response to a question from IPS, Adesina further explained that the bank had doubled its investment in climate finance from $12 billion to $25 billion by 2020.

“Almost 50 percent of our finance will be going to climate adaptation as opposed to climate mitigation. So we are the first multilateral development bank to actually reach that balance in terms of adaptation and mitigation,” he said.

• Climate mitigation is the actions taken to reduce or curb greenhouse gases, thereby addressing the causes of climate change to prevent future warming. However, climate adaptation addresses how to live with the impacts of climate change.

“I believe that coal is the past. I believe that renewable energy is the future and we as a bank are investing in not in the past, but in the future in making sure that we are investing in solar energy, in hydro energy, in wind, all types of renewable energy that Africa needs,” Adesina said.

“We want Africa to lead in renewable energy.”

He said one of the projects was the AfDB’s Green Baseload Facility, which according to the bank, aims “to accelerate the transition towards more sustainable baseload power generation options and prevent countries from locking themselves into environmentally damaging and potentially economically costly technologies”.

“It’s a $500-million facility that we have set up to support countries that want to shift out of fuel-based energy into renewable energy and providing access to finance at a cheaper rate to be able to make that transition,” Adesina said.

• The bank’s biggest investment is the Desert to Power project, which was announced in December at the United Nations’ Climate Conference in Katowice, Poland.
• The initiative plans to supply 10 GW of solar energy by 2025 to 250 million people across 11 Sahelian countries. 

“That would make it the largest solar zone in the world,” Adesina stated. The bank will work in partnership with various investors to also establish plants on the continent that will manufacture the solar panels for the project.

• The AfDB has always stated “a lack of energy remains a significant impediment to Africa’s economic and social development“.
• According to AfDB, energy poverty in Africa is estimated to cost the continent 2 to 4  percent  GDP annually.

Africa’s climate crisis

The continent is facing climate change impact with rising temperatures and reduced rainfall.

The Sahel, which lies between The Sahara and the Sudanian Savanna, offers a blaze of sunlight with little rain as it is the region where temperatures are rising faster than anywhere else on Earth, according to the Great Green Wall initiative, a project that aims to reverse desertification and land degradation in the area.   

Last month, IPS reported that as The Sahara desert continues to expand, it tears apart families, forces migration from rural areas to cities and has contributed to conflict for precious resources of water, land and food.  

In July, IPS reported that the parts of Kenya had already warmed to above 1.5˚C — a figure deemed acceptable by global leaders during the 2015 Paris Agreement. But at such high temperatures a study found that over the last four decades livestock some Kenyan counties had decline by almost a quarter because of the temperature increase over time.

• During the U.N. Framework Convention on Climate Change in Paris in 2015, all countries committed under the Paris Agreement to “holding the increase in the global average temperature to well below 2°C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5°C”.
• But last year the U.N.’s Intergovernmental Panel on Climate Change released a special report warning that the world would face the risk of extreme heat, drought, floods and poverty at a temperature rise of 1.5°C.

Siby Diabira, regional head for Southern Africa and the Indian Ocean for PROPARCO, a subsidiary of Agence Française de Développement (AFD) focused on private sector development, told IPS that last year the group did $1.76 billion in investment deals, half of which was in Africa. Credit: Nalisha Adams/IPS

However, the forum showed that there remain a number of investors looking to provide funding for renewables and other development project on the continent. 

Siby Diabira, regional head for Southern Africa and the Indian Ocean for PROPARCO, a subsidiary of Agence Française de Développement (AFD) focused on private sector development, told IPS that last year the group did $1.76 billion in investment deals, half of which was in Africa. The AIF was still in its early stages to make a pronouncement on the success of the deals, Diabira said, but “so far so good”.

Diabira said the French development agencies aimed to be 100 percent compliant with the Paris Agreement and hence were investing heavily in renewable energy.

• She explained that PROPARCO was involved in “all types of renewable energy from hydro to solar to wind”, adding that there was a need for a mix of both traditional and renewable energy generation.

“I have been attending some of the boardroom [discussions]. It is a quite interesting gathering to have for the second year and to have so many different types of investors and projects that are raising funds for these types of events,” she said.

“We have been present in financing the first few rounds of renewable energy projects in South Africa and our idea is also as a [Development Financial Institution] DFI to be able to contribute to create this market for the commercial banks to come with us on those types of projects,” Diabira said.

Admassu Tadesse, President of the Trade and Development Bank, also pointed out that partnership agreements among the various banks and partners had strengthen their position in deals.

“If you have smart partnerships you can scale up collectively. With the African Development Bank we have signed a risk participation agreement to the tune of $300 million, which will allow us to move speedily into fields and have partners coming into deals alongside us.”

He said they expected to soon sign a deal with the European Investment Bank (EIB) that will again strengthen their position.

EIB vice president Ambroise Fayolle said they were attending this year with great intentions to develop transactions. He said it came on the back of their 2018 record year of investments in the continent, which amounted to some $3.6 billion — more than 50 percent of which was in the private sector. The bank signed 3 partnerships already, he said, none of which would have been possible without the AIF.

And as Adesina stated in a video message at the start of the forum, “Let the deals begin”.

Traders transporting goods in Mali. Thanks to the African Development Bank (AfDB), infrastructure linking African nations has made cross-border transportation of goods easier. Courtesy: Mary Newcombe/ CC by 2.0

By Issa Sikiti da Silva
COTONOU, Benin, Nov 8 2019 (IPS)

Buses carrying cross-border traders and goods from Cotonou in Benin to Bamako in Mali have recently been using the Lomé route — travelling through the capital of Togo and then getting onto the Ouagadougou corridor on their way to the Malian capital.

“The Lomé-Ouaga route is smooth and there are no potholes. It makes life easier for both drivers and passengers. Long distance travels needs good roads because it is very challenging for transporters and thousands of traders who depend on this business to survive,” Ali Oumarou, a transporter who travels the 950 km route, tells IPS in while in Benin’s commercial capital, Cotonou.

• The construction and rehabilitation of the Lomé-Ouagadougou corridor is 70 percent funded by the African Development Bank (AfDB).
• The AfDB is rehabilitating the Lomé-Ouagadougou corridor, repaving 300 km of road and training young people in road maintenance. The project has increased traffic volumes and reduced journey times, generating trade across the region, the AfDB, headquartered in Abidjan, Ivory Coast, said last week.
• The AfDB said that it has provided $238 million as a financial support for the project. 

“Bank investments in regional infrastructure are helping to improve connectivity across Africa, linking rural areas to towns and cities, linking producers and consumers across national boundaries, promoting trade and investment and building regional markets,” the AfDB pointed out.

Traders and those transporting goods and people across these routes have appreciated the new infrastructure. “This road has cut short our journeys and helped us a lot. Before we used to travel for six days to Ouaga from Lomé due to the bad state of the road, but since the road was rehabilitated, it only takes us two days, depending on the condition of the car,” Vincent, a long distance driver, told IPS.

• There is much more that the AfDB has done to link Africa’s cities.  
• The Addis-Mombasa highway is another example. “The 895 km highway corridor linking Kenya and Ethiopia has not only eased cross-border traffic between the two countries, it has also enhanced economic integration, resulting in jobs and improved livelihoods across the region,” the bank said.
• The AfDB, which has a AAA rating, supports numerous projects across that continent that contribute to growth, creating jobs and household income, and increasing government revenue, among others.

Reinvigorated by the successes harvested under the GCI-VI, during which it had a capital of $90 billion, the AfDB has embarked on the capital increase exercise to do much more to improve the citizens’  lives of its member states.

Last week, the Governors of the AfDB met in Cote d’Ivoire’s capital Abidjan, approving a historic $115 billion increase to the bank’s authorised capital base to $208 billion.

According to AfDB President Akinwumi Adesina,  “We have achieved a lot, yet there is still a long way to go. Our responsibility is to very quickly help improve the quality of life for the people of Africa. This general capital increase represents a very strong commitment of all our shareholders to see better quality projects that will significantly have an impact on the lives of the people in Africa –  in cities, in rural communities, and for millions of youth and women.”

The funds are expected to improve the lives of:

• 105 million people who will have access to new or improved electricity connections;
• 244 million people who will benefit from improvements in agriculture;
• 15 million people who will benefit from investment projects;
• 252 million people who will benefit from improved access to transport;
• and 128 million people who will benefit from improved access to water and sanitation.

One of the key focuses of the bank going forward will be climate change. The bank currently invests in various climate change projects, such as the Desert to Power initiative, which will help supply electricity to 250 million people in 11 countries across the Sahel by tapping into the region’s abundant solar resources.

But going forward it will be doubling its investments, AfDB’s president said.

“We as a bank had said we are going to double our financing for climate change…so the shareholders strongly supported that direction…They are asking that we do a lot more on climate,” Adesina said.

Tumi Solange Akinloye, political and international relations commentator, told  IPS of the increase, “this simply means that there will be more money for African countries to loan, which will serve to continue carrying out their projects, for the betterment of their people.”

The general capital increase comes ahead of the AfDB’s Africa Investment Forum —  a platform to attract private sector finance.

The forum was launched last year by the Bank and its partners. This year it will take place from Nov. 11 to 13 in South Africa. The forum has been lauded by Africa’s CEOs as changing the investment narrative for Africa.

“I am an optimist on Africa. My optimism does not imply non-awareness of the challenges facing the continent, but stems from a conviction that the best of Africa lies ahead of us,” Adesina said at the North American launch of the forum last year.