COP27: Fossil fuel investment will lead to debt, stranded assets, UN body warns Africa | News24

• UN Economic Commission for Africa says fossil fuel infrastructure will result in billions of stranded assets and legacy debts.
• South Africa’s decommissioned Komati coal-fired power plant to be repurposed for clean energy.
• World Bank calls for partnerships in promoting Distribute Renewable Energy Systems (DRES).
• For more stories, go to the News24 Business front page.

The United Nations Economic Commission for Africa (UNECA) has warned that leaders in countries investing in fossil fuel infrastructure will leave behind a legacy of debt to be carried for generations to come.

Arriving at the COP27 summit, African countries wanted to argue that fossil fuels were necessary for them to increase access to electricity in a continent where 50% hardly have any.

This is further buttressed by the World Bank in its latest report saying only eight African countries are on course to achieve universal electricity access by 2030.

Electricity is key for economic development and food production. 

While a study carried out by the African Union in June this year highlights that coal and oil will both work for the continent in the short to medium term, UNECA thinks it’s a bad idea.

“Developing new fossil fuel infrastructure would result in billions of stranded assets and debt for future generations,” said Antonio Pedro, the executive secretary at UNECA.

South Africa, through its Just Energy Transition Project, is set to repurpose the recently decommissioned Komati coal-fired power plant to a clean energy station.

The SA government has since implemented the Integrated Resource Plan 2019, which aims to retire 12GW of old coal-fired power plants by 2030 while installing 18GW of renewables to meet its climate change and energy security targets.

The country’s power sector is a major contributor to greenhouse emissions, accounting for 41% of total carbon dioxide emissions.

SA is a pacesetter and it’s not going to be a similar case for all African countries. As such, UNECA said countries with gas a lesser pollutant compared to coal, will have their own “country-to-country” plans to reach zero emissions by set dates.

“Gas may play a role in transition on a case-by-case basis and in very specific cases, provided that governments have clear exit plans in the context of a national strategy to get to net zero in line with the 1.5-degree goal of the Paris Agreement. 

“For example, for some developing countries who have the existing resource and infrastructure, gas will play a major role in their transition to a net zero future,” said Pedro. 

Distribute Renewable Energy Systems

The World Bank says Distribute Renewable Energy Systems (DRES) which is the inclusion of generators onto the existing conventional power system networks, could be the answer to Africa’s low access to electricity while dumping fossil fuels.

“The expansion of access through Distribute Renewable Energy (DRE) systems will answer an urgent need quickly and support climate resilience, food security, and human capital development goals,” the World Bank said in a statement.

The World Bank will lead the DRE initiative across Africa and requires political will as well as support from private investors.

“The Distributed Access through Renewable Energy Scale-Up Platform (DARES) calls for joint action by government, private investors, and development agencies to solve Africa’s immediate needs while developing DRE solutions that can be applied globally,” the bank said.

In most of rural Africa, there’s no access to electricity, hence firewood, and in some cases coal and its byproducts, provide power. But the renewable energy initiative is ideal for home use.

“DRE systems generally involve a solar photovoltaic station paired with battery storage. In rural communities, these systems can serve a health care facility, for example, or a group of customers such as households or businesses in a village, operating independently from the national power grid,” the World Bank said.