In addition to the mounting demands for greater resilience and sustainability, Africa’s fast economic growth poses a formidable energy dilemma. One of the key development issues for the continent is figuring out how to sustainably meet rising energy demands. Africa has access to a variety of renewable energy sources, such as hydro, solar, wind, and others, as well as the time, is opportune for careful planning to assure the correct energy balance. The energy industry on the continent will be shaped by decisions taken now for many years.
It has been decided to create the PAREF (Pan-African Renewable Energy Fund) to hasten the adoption of renewable energy in Africa. With the help of the $300 million funds, it might be possible to close the continent-wide energy access gap while also advancing Africa’s transition to a low-carbon economy in a way that is both socially responsible and just.
According to the IEA (International Energy Agency), from now until 2030, countries in sub-Saharan Africa will need to invest $28 billion annually to close the energy access gap. Of this amount, $13 billion will go toward mini-grids, $7.5 billion will be spent on grid improvements, and $6.5 billion will be allocated to off-grid projects.
By utilizing cutting-edge finance and development strategies for both greenfield and brownfield projects, PAREF’s investments will aim to hasten the implementation of renewable energy works across the continent. In addition, PAREF will work to hasten the adoption of technology that can produce and store energy more efficiently while converting high carbon-emitting power sources to less carbon-intensive alternatives. With the help of PAREF, industrial development and socio-economic development in Africa can be fueled by reliable, inexpensive, and low-carbon energy sources.
The fund was created in collaboration between Anergi Group, a major African power supplier, and Harith General Partners, which is among the biggest investors in African infrastructure. The PAREF will expand on the successful track record developed by Anergi, a Harith-supported energy investment entity, in creating, financing, and carrying out some of Africa’s biggest independent power projects. A total of 1,413MW of operational renewable and thermal output is spread across Nigeria, Ghana, Kenya, and South Africa in Anergi’s portfolio of five operational assets.
Sipho Makhubela, CEO of Harith, said the fund offers a significant chance to invest in the modernization of Africa’s energy industry.
“PAREF is a crucial and urgent reaction to climate change, driving Africa’s race to net zero, moving to a low carbon future, and linking millions of Africans to clean, green energy.” 75% of the 770 million individuals without electricity are in sub-Saharan Africa. Africa continues to be very vulnerable to climate change, and coal, oil, and biomass continue to serve a key role in the continent’s energy supply chain. To support the shift to a low-carbon future, PAREF will work to bring Africa’s supply of energy into the twenty-first century.