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African Energy FuturesMafalda DuarteAfrican Development Bank
Outline
• Africa Today• Global and Africa’s Income Inequality• Global and Africa’s Environmental
Degradation• Additional Challenges due to Climate Change• How to Support Transformation• What is needed• Innovative finance• Opportunities in the Post-Rio+20 Landscape
Africa Today: Continued and robust growth…but mostly driven by commodity prices
Africa Today: Business climate is improving…but private sector still faces bottlenecks
Africa Today: Poverty is falling but unequally
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Average Top 25, 1960-2010
GD
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001975 1995
Substantial But Uneven Progress
Source: World Bank, World Development Indicators; OECD, DAC Statistics
Global Income Inequality
Africa Today: Massive infrastructure deficit
Africa Today: Regional integration and intra-regional trade needs deepening
Source: Rockström et al., Nature (2009)
??
Global Environmental Degradation
Additional Challenges
Due to
Climate Change Pictures: AfDB
Impacts on water resources
• Warming expected to increase up to 1.4 ° C by 2020; 5.1 ° C by 2080
• Increase in temperature = greater evapostranspiration; e.g. 1° C warming results 10% reduction in surface runoff (Morocco)
• Changes in variability - more severe, intense, prolonged droughts and floods
• Changes in groundwater recharge
• By 2020, up to 250 million people in Africa are projected to be exposed to increased water stress
Impact on Agriculture
• Changes in pests, diseases, growing seasons, land-use
• Temperature-induced crop yield losses of up to 16% per 1° C
• Overall reductions of up to 22% across 5 crops
• By 2020, yields from rain-fed agriculture could be 50% less in some countries, affecting food security and exacerbating malnutrition
Impact on Coastal Zone and Marine Resources
Marine Resources at Risk
• 22 of 33 coastal countries “highly vulnerable” to CC impacts on fisheries are in Africa
African Cities at Risk
• 19 big cities (1 million +) in LECZ*
• Mombasa: 17% city below 0.3m
• Banjul: most below 1m• Egypt: 2 million people
below 0.5m• Abidjan, Lagos at high risk
But Opportunities Too
How to SupportTransformation
Inclusive Growth
Across Age
Across Gender
Across Geography
Gradual Transition to
Green Growth
Building Resilience
Managing Natural Resources
Sustainable Infrastructure
How to Support TransformationInfrastructure development
• Improve transport & logistics chains• Meet rising demand for energy• Enhance water resources• Expand broadband telecommunications• Integrate urban infrastructure
$30-50 Billion Annual Gap
2% of Lost AnnualGDP Growth
How to Support TransformationRegional integration
• Hard infrastructure • Support soft infrastructure• Trade and Customs procedures• Movement of labor and capital• One stop border posts
Only 12% of Africa’s Trade is Intra-Regional
How to Support TransformationPrivate sector development
• Improve investment and business climate
• Expand access to infrastructure• Promote enterprise development• Improve access to finance• Scale up support to MSMEs
50 million MSMEs22% Access to Finance
Low productivity
How to Support TransformationGovernance & accountability
Build accountability: public spending, delivery Support anti-corruption initiatives Strengthen debt-management capacity Promote fiscal decentralization Bolster property rights, access to justice Improve natural resource management
20% live in fragile statesWeak institutions
Poor service delivery
How to Support TransformationSkills & technology
Build skills: science, technology, engineering
Support women in technical & scientific study
Support innovation & entrepreneurship Develop networks of excellence and
mentoring programs
250 million Africansbetween 15 and 24
15 million new job seekers annually
TAILORED STRATEGIES, POLICIES THAT PROMOTE SMART BEHAVIOR AND TACKLE UPFRONT CAPITAL CONSTRAINTS
What is Needed
Innovative Finance
• Focus on upfront financing: – Need for new sources, but also project preparation finance and
risk-management schemes– Borrowing constraints– SMEs and local governments
• Green finance, but also: – Leverage public and IFI resources: engage private banks; Fund-
of-funds; buy down interest rates– Local public finance– Payment for environmental services
Opportunities in the Post-Rio+20 Landscape• SDGs and the post-2015 int’l development agenda
– “Shared prosperity” and the challenge and imperative of integrating sustainability into the poverty-centric MDG framework
• Natural Capital Accounting (NCA) + WAVES– UN Statistical Commission adopted a System for Environmental-
Economic Accounts, and 60+ countries embraced NCA at Rio
• Data, tools and knowledge– Clear demand from advanced and developing countries for
better information and methods and opportunities to share good (and failed) practices
Targeting and Tailoring
