Page 5 - AfrElec Week 46 2022

AfrElec COMMENTARY AfrElec

cushioning their consumers from rising prices. in sub-Saharan Africa,” the IEA said.
Many Africa utilities were already in a perilous The agency estimates achieving univer-
financial situation heading into the pandemic, sal global access to electricity by 2030 would
and operational losses have been climbing sub- require annual investments of $30bn from
stantially since then. now to 2030, of which around two-thirds are
Off-grid access solutions are facing even needed in sub-Saharan Africa. As highlighted in
stronger headwinds, with inflation hitting con- the Africa Energy Outlook 2022, international
sumer demand. Prices of key components used support is essential to catalyse investment, espe-
to manufacture solar PV modules, batteries and cially in today’s difficult financial conditions, the
inverters are sharply rising, which has been fur- IEA said. “Reaching this level is well within the
ther exacerbated by local currencies depreciating means of the international community, and must
against the dollar. be an unerring focus for development banks,”
The cost of solar and hybrid mini-grids has the IEA commented.
increased by at least 20% in 2022 from pre-pan- In order to meet the challenge Egypt is in the
demic levels. The average market price for a vanguard of turning to nuclear power to meet
new solar home system (SHS) is up by around demand.
30% since 2020, causing households to opt for At COP27 the Egyptian Presidency made it
smaller or lower quality systems. Sales of large clear that accelerating efforts to reach universal
SHS in 2021 were nearly a third lower than their access will be a key part of its agenda, and the
2019 peak with the largest declines happening in IEA is supporting the Presidency as they launch
East Africa. These effects are putting firms in the the Africa Just and Affordable Energy Transi-
off-grid industry under financial duress, with a tion Initiative (AJAETI). “This timely initiative
majority of firms indicating they risk bankruptcy aims to facilitate technical exchanges and help
in the next three years under the current finan- improve the investment environment for access
cial circumstances, the IEA reports. solutions in Africa. The international commu-
“Together, these setbacks put the world nity can play a decisive role by mobilising more
further behind on meeting targets for univer- financial support toward access solutions and
sal access by 2030, canonised in the United the clean energy transition in Africa, which can
Nation’s Sustainable Development Goal 7. reduce import dependence while helping coun-
Under today’s policies, our World Energy Out- tries meet their growing energy needs,” the IEA
look 2022 projects 660mn people still without said.™
access to electricity in 2030, 85% of those living

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