Experts: Africa May Lose $415bn Annually to Climate Change Impacts by 2030
Emmanuel Addeh
Energy experts have said that Africa may risk $415 billion annual economic losses due to climate change impacts from the damage done by natural disasters to urban infrastructure by 2030.
Senior Director at Africa Finance Corporation (AFC) and CEO of AFC Capital Partners, Ayaan Adam noted that climate change may significantly damage infrastructural assets, leading to the loss of $415 billion by 2030 in Africa alone
He was speaking at the virtual sustainable financing workshop organised by the African Refiners and Distribution Association (ARDA).
“With Africa being the most vulnerable continent to climate change, mainstreaming climate change is a key requirement for the long-term viability of its infrastructure,” Adam noted.
Adam said the effect of climate change in Africa was disproportionate to its share of global emissions – with implications for future infrastructure requirements.
Future infrastructure developments, Adam said needed to be able to reduce, accommodate or recover from the effects of natural disasters and climate extremes, adding that this would require climate resilient infrastructure planning plus additional cost consideration for development.
As such, the AFC official noted that the companies were promoting their Infrastructure Climate Resilience Fund (ICRF), which will drive investments in climate resilient infrastructure projects across the African continent in the AFC’s core sectors – transport & logistics, power, telecoms and industrial parks.
Also speaking, Executive Secretary of the organisation, Anibor Kragha, noted that strategic options were needed for financing energy transition in the African downstream petroleum sector.
Kragha disclosed that sub-Saharan Africa’s import needs for transport fuels will continue to grow in the foreseeable future, making the region the world’s largest importer by 2030.
He lamented that complex, inefficient supply chains, intra-African trade challenges impede implementation of cost-effective clean energy solutions on the continent.
But he added that the African Continental Free Trade Act (AfCFTA) presents an opportunity for the continent to address this issues and deploy an inclusive, equitable energy transition roadmap that captures the priorities, challenges and perspectives of Africa’s low-carbon emitting countries.
The ARDA chief stated that Africa’s share of global emission remained low, stressing that the roadmap for energy transition must not prioritise near-term emissions reductions over support for economic development and energy transformation.
Global Head, Client Relations at Afreximbank, Rene Awambeng highlighted the impacts of growing urban population in Africa on energy demand for industrial production, cooling and mobility.
According to him, energy demand in Africa grows twice as fast as the global average, and Africa’s vast renewables resources and falling technology costs can drive double-digit growth in deployment of utility-scale and distributed solar photovoltaics (PV), and other renewables, across the continent.
He noted that although clean energy and decarbonising international investment and finance seem to be dominating the development discourse, Africa could leverage on its vast base of existing solid minerals, including rare-earth minerals and metals, that would fuel clean energy.
In a joint presentation, experts at Vitol, Michael Curran, Vitol Global Head of Carbon Tradiing and Maryro Mendez, Vitol Refineries Research Team Lead, noted that technologies already exist to develop refineries that produce net zero carbon emissions.
But they noted that Environment, Social & Governance (ESG) investment mandates and capital reallocation away from hydrocarbons into renewables/energy transition amongst other issues have resulted in reduction in financing options and increased debt service costs for carbon -intensive sectors.
“Most companies already have plans for reducing emissions. These include measurement and reporting, operational improvement, and incorporating carbon-abatement objectives in investment proposals.
“Implementation, however, is in an initial stage and faces several barriers: resources are scarce, in terms of both capital and technical capabilities, and CO2 reduction is not always a top priority,” the experts said.
While the refining sector contributes only 3 per cent to global energy sector emissions, there are significant opportunities for reducing these emissions especially in regions like Africa where demand for refined products will grow and emissions will grow accordingly, “they noted.
