Africa energy gold mine

Africa wakeup calls on renewable energy are landmark opportunities and bailout from poverty, energy crisis and economic difficulties. BEKSOLAR VENTURES is here to help Africa countries and rest of the world to contribute to reduction of carbon emission in our climate to make our environment a living and sustainable because these requires the attentions of our world leaders in politics, religions, economics and other social organization around the globe. BEKSOLAR VENTURES is here again to explore the natural and renewable resources we are endowed with in most of the African countries and most especially Nigeria instead of spending excessively on the existing energy sector without return on investment. It is clean, cheap and durable if wisely used for better purpose.

Investing in renewable energy and accessing carbon finance is indeed challenging, but the stakes are high and the benefits great. By implementing strategies to overcome barriers, African countries stand to secure significant gains.

Stable energy supply is essential for strong economic growth and poverty reduction. Renewable energy is abundant and diverse and has the advantage of reducing reliance on finite or imported energy resources. It includes, but is not limited to biomass, solar power, wind power, hydropower, tide power and geothermal power. It can improve energy security, especially for non-oil producing countries, creates employment and helps fight poverty by improving energy accessibility, particularly for remote or rural populations. Furthermore, the market for clean energy technologies is profitable. Currently valued at USD155 billion, (Global Financial Crisis, 2009) it is expected to reach a global market size of USD1.9 trillion by 2020 (UNEP Finance Initiative CEO Briefing, 2004).

The active creation of carbon finance funds and facilities by the international community has been an important factor in the expansion of carbon finance. These funds operate by either directly investing in projects and companies or by buying carbon credits outright, while the facilities help to fund initial project costs such as registration fees and impact assessment studies (State and Trends, 2008). In 2007, a global carbon finance pool of USD9.5 billion was under the management of about 58 public and private funds. A year later, this amount had grown to USD13.8 billion spread over 67 funds. In 2009, the World Bank Group alone is managing over USD 2.2 billion in funds (pledged by 19 governments and 66 firms) for its carbon funds and facilities (World Bank Group Database, 2009).

The ever-enlarging scope and size of these funds, combined with improved market access, increased market compatibility and clearly identified emission reduction targets, create a strong incentive for renewable energy investment. Moreover, interest in the voluntary market could sustain much of the carbon market growth. As shown by a Point Carbon survey analysis undertaken in 2009, renewable energy projects have a comparatively high exchange value on the voluntary carbon market compared to other projects (Carbon 2009).

Africa continent- Little investment in renewable or use of carbon finance: While the continent is well endowed with renewable energy prospects, only a very small proportion of renewable energy sources for power generation is currently exploited. For example, as figure 2 shows, only 7% of hydroelectricity and less than 1% of geothermal potential is exploited (UNIDO International Conference, 2008).

Benefit for African continent-Great potential and benefits: Africa is in a position to take advantage of carbon finance mechanisms to expand investment in (and access to) energy throughout the continent. The potential of renewable energy sources is great, with an estimated potential of 7,000MW from geothermal alone (UNEP Press Release, 2008). The World Bank estimates that Sub-Saharan African has the technical potential for more than 3,200 CDM projects, which could add more than 170GW of power - more than twice the current installed generation capacity (State and Trends, 2009). Production costs are lower and existing infrastructure is often limited, opening the way for the continent to "leapfrog" over old technologies to new ones. Renewable energy also provides a unique opportunity to reach Africa's rural populations because project size is flexible and often independent of a centralized infrastructure. Small projects, for example hydropower from local rivers or isolated solar power systems, do not need to be connected to a regional or national power grid. Biomass and solar power can also provide a sustainable energy supply for remote villages in oil-importing landlocked countries with limited costs compared to fossil fuels. By comparison, many sites suitable for renewable energy in OECD countries are costly to exploit and face legislative challenges such as strict environmental regulations.

Investing in renewable energy also helps to reduce poverty. The extent to which energy scarcity impacts the day-to-day survival of the severely impoverished has led the United Nations, through the Millennium Development Goals (MDG) framework for action, to directly link poverty reduction to increased energy capacity and distribution through renewable energy sources.

A bridge to be crossed: Carbon financing is still a novelty to many African countries but the growing importance of investing in renewable energy and tapping into financing options like the CDM necessitate new skills among those dealing with energy and climate change issues. Governments should create policy frameworks that facilitate the creation of pools of experts and retain individuals who have worked on CDM projects in the past. Governments should support research institutions such as universities by providing grants for skills-based courses and seminars relevant to climate change and carbon financing. Vocational programs focused on renewable energy projects are a good way of building skills in a sustainable way, especially if these programs are supported with financing and teaching staff over time.

Responsibility for Government on renewable energy: Proper policy design and implementation on the part of African governments is critical for the success of renewable energy projects. For instance, Mali has formulated the Action Plan for Renewable Energy Promotion, a policy plan which sets a target of increasing the contribution of renewable energy to total energy supply from less than 1% in 2002 to 15% by 2020. South Africa and Egypt also have national targets for renewable energy production (Renewable Global Status Report, 2007). In addition, African governments would benefit from better definition of the mitigation actions that could function as Nationally Appropriate Mitigation Actions (NAMAs).Strengthen the role of Designated National Authorities (DNAs): Designated National Authorities (DNAs), the bodies that oversee the approval and registration of CDM projects, deserve special attention from governments because of their position as the nexus of all CDM issues. While DNAs are quite prevalent in Africa - with 41 on the continent, governments should strengthen the regulatory, promotional and coordinating roles the DNAs play.

Improve regional coordination: As renewable energy becomes more important, and the debates around climate change more salient, African governments should coordinate among themselves to find common policies and a vision for the future. A good example is the recent nomination of Prime Minister Zenawi of Ethiopia to lead a team of African environment ministers for a common African position at the UNFCCC negotiations to be held in Copenhagen in December 2009 (APF Report, 2009). But to make such coordination sustainable, there needs to be an institutional framework at regional level for issues of common concern. The Inter-Agency Nairobi Framework for Capacity for Carbon Market Development in Sub-Saharan Africa (Nairobi Framework) provides capacity building resources through a regrouping of the UNDP, UNEP, the World Bank Group, AFDB and UNFCCC. There should also be more meetings for experience sharing such as the Africa Carbon Forum, which was held in September 2008 under the aegis of the Nairobi Framework and organized by the International Emissions Trading Association (IETA) and the UNFCCC Secretariat. It presented an opportunity for African countries to present their CDM projects at a carbon investment trade fair; allowed DNAs to share their experiences; and brought together project developers, financial firms, and key policymakers. More forums should be held and existing ones expanded to encompass all stakeholders.