According to a new report by the International Energy Association (IEA), Africa will receive only 2% of the anticipated $2 trillion global clean energy investment in 2024. This translates to around $40 billion directed towards clean energy initiatives on the continent.
Total Energy Investment in Africa
In 2024, total energy investments in Africa are projected to reach $110 billion. However, a significant portion of this, approximately $70 billion, will be allocated to fossil fuels. The remaining $40 billion will be invested in various clean energy technologies.
Energy Needs and Current Investments
The report highlights the stark disparity between Africa’s energy needs and the current level of investment. Over 600 million people in Africa lack access to electricity, and around 1 billion people do not have access to clean cooking fuels. The share of GDP allocated to energy investment in Africa is 1.2%, compared to the global average of 1.8%.
Required Investment for Sustainable Development
To achieve its energy and climate-related goals, Africa will need an annual investment of $200 billion by 2030. The current financing levels, which are around $25 billion annually, fall significantly short of this requirement. The report states, “Our tracking of energy spending suggests that around USD 110 billion is set to be invested in energy across Africa in 2024, of which nearly USD 70 billion to fossil fuel supply and power, with the remainder going to a range of clean energy technologies. Spending trends vary widely across Africa, but neither the total amount nor the proportion spent on clean energy is enough to put the continent on track to reach its sustainable development goals.”
Global Energy Investments
The IEA’s annual World Energy Investment report projects that total energy investment will surpass $3 trillion for the first time in 2024. Of this amount, $2 trillion is earmarked for clean technologies, including renewables, electric vehicles, nuclear power, grids, storage, low-emissions fuels, efficiency improvements, and heat pumps. The remaining funds will be directed towards gas, oil, and coal.
Leading Regions in Clean Energy Investment
China is projected to lead clean energy investment in 2024 with an estimated $675 billion, followed by Europe at $370 billion and the United States at $315 billion. Solar photovoltaic (PV) technology will receive the most investment among electricity generation technologies, growing to $500 billion in 2024 due to declining solar module prices.
Upstream Oil and Gas Investment
Global upstream oil and gas investment is expected to rise by 7% in 2024 to $570 billion, continuing a similar increase seen in 2023. This growth is primarily driven by national oil companies in the Middle East and Asia.
Backstory and Future Initiatives
During the World Bank/IMF spring meeting in April, the World Bank and the African Development Bank (AfDB) partnered to provide electricity for 300 million Africans by 2030, in a plan estimated to cost around $30 billion. Currently, 83% of the world’s population without access to electricity resides in Africa. The World Bank aims to provide electricity access to 250 million people, while the AfDB will serve 50 million, helping to halve the number of people without electricity in Africa by 2030.