Energy Transition: Better Way Forward

Adeniran Ajakaiye

As the world grapples with the challenge of transitioning to sustainable energy, Africa has an opportunity to leapfrog traditional energy sources and drive inclusive economic growth. At Africa Plus Partners, we believe that by investing in sustainable carbon+ infrastructure assets, we can foster economic growth and development across Africa, while combating climate change and improving the quality of lives for people around the continent.

The International Energy Agency’s (IEA) recent reports highlight the critical need for private sector involvement in facilitating a successful energy transition across Africa. According to the IEA, global subsidies for energy consumption have surpassed a historic $1 trillion mark in 2022, double the figure reported in 2021 and almost five times the amount seen in 2020.

To establish a balance between lowering emissions through inexpensive sustainable energy sources and accelerating development across Africa, we must develop innovative solutions.

One such solution is the private sector’s involvement in renewable energy projects, which has already been successful in many parts of Africa. For example, the Noor Ouarzazate Solar Complex in Morocco, the world’s largest concentrated solar power plant, was built with private sector funds from companies like ACWA Power and Siemens.

Unlocking latent demand by increasing access to affordable and sustainable energy solutions is essential to achieving a successful energy transition in Africa. Off-grid solar energy solutions, like those offered by companies such as M-Kopa Solar in Kenya, have already proven successful in providing affordable and reliable energy access to over 1 million households and small businesses.

By investing in key sectors such as power, transport & logistics, construction, technology, and agriculture, we can create the desired value, while also advancing the cause of sustainability. Africa Plus Partners’ ‘Carbon+’ investment strategy provides a unique value proposition, and we are well-positioned to invest in opportunities that have significant positive socio-economic potential. Our focus on ESG-compliant investing ensures that we invest in sustainable infrastructure assets that promote inclusive economic growth.

The role of pension funds in financing sustainable infrastructure cannot be overemphasized. The investment by the Government Employees Pension Fund in South Africa in renewable energy projects like the Jeffreys Bay Wind Farm is a testament to this fact. The project has helped to reduce carbon emissions and has provided stable returns for pensioners.

The listing of Africa Plus Partners’ premier Fund, Africa Infra Plus Fund I (AIPF I), by way of memorandum listing on the Nigerian Exchange Limited (NGX) is a bold step towards addressing the argument put forward by Pension Fund Administrators (PFAs) in Nigeria that there aren’t sufficient viable instruments to invest in. AIPF I is majority-owned by PFAs and provides an investment platform for Nigerian and international investors to invest in sustainable infrastructure. This approach aligns with our ‘Carbon+’ investment strategy and will foster public perception and a sense of ownership, which is essential for the long-term security and development of sustainable infrastructure businesses.

In conclusion, private sector engagement is essential to achieving a successful energy transition in Africa, and pension funds can play a significant role in this regard. At Africa Plus Partners, we are committed to sustainable infrastructure investing, and we see great social and economic opportunities arising from focused investments into funding Nigeria’s energy transition. By working collaboratively with the global community to achieve net-zero emissions, Carbon+ infrastructure development would be the catalyst for achieving sustainable economic growth and ensuring that the most vulnerable populations in Africa are not left behind. The future of Africa depends on sustainable infrastructure investments, and we are proud to be a part of this transformative journey.