Why renewable energies are crucial for Africa's prosperity

In a recent article, the World Economic Forum (WEF) emphasised the crucial role of the productive use of renewable energies for Africa's economic development.

Around 600 million of the nearly 1.5 billion people in Africa alone – 40 per cent – still live without reliable access to electricity. That alone is far more people than the EU has inhabitants, and these 600 million people account for 83 per cent of the world's population without access to energy.

In addition to mere access to electricity, its productive use is also coming into focus. What can people do with this electricity?

What is really driving change are the opportunities that energy supply opens up for farms, workshops and small businesses. Water pumps, cold chains, rice mills and welding equipment – such applications not only improve the quality of life, but also provide the basis for jobs and income.

Local solutions with a big impact

Initiatives such as Mission 300, launched by the African Development Bank and the World Bank, aim to provide an additional 300 million Africans with electricity by 2030. Decentralised solutions such as mini-grids and solar power systems, which specifically enable economic activity in rural areas, are an effective means of achieving this ambitious goal.

In Nigeria, for example, solar mini-grids have already helped local entrepreneurs increase their incomes. In some cases, the increase has been significant, as illustrated by the example of one entrepreneur. She tripled her income in a pilot project by switching her freezer from diesel to solar power. Why? Because intact cold chains ensure the shelf life of perishable goods, thus avoiding waste. Producers can sell their agricultural products and seafood at better prices. Background: In Nigeria, an estimated 45% of annual food production is lost, partly due to poor storage.

Challenges in expansion

Intelligently generated and used electricity therefore unlocks potential. We often see this in discussions with our customers.

Despite promising approaches, there are obstacles: financing gaps, bureaucratic hurdles and a lack of local technical expertise are slowing down progress.

It is hardly surprising that the World Economic Forum concludes that financing is often lacking. Many companies in Africa simply cannot afford this ‘productive’ energy. Some governments do promote the transition, but even where government subsidies are available, they are often very complicated, involving lengthy forms and risk-averse banks.

Partnerships are crucial, according to the WEF, not only between donors and governments, but also between cooperatives and even religious groups.

Energy as a key lever for development

When we Europeans think of solar energy, we primarily see the environmental aspect. In Africa, it's different, because here the energy transition means more than climate protection; it is a key lever for economic development. Every solution should therefore be both ecologically sustainable and economically beneficial. Small, locally adapted systems – such as a solar-powered ice machine in a fishing village – can be just as transformative as large infrastructure projects.

The WEF concludes that Africa's path to prosperity lies in the productive use of renewable energies. Decentralised, economically oriented energy systems that take local needs into account can promote sustainable development and open up new prospects for millions of people. At EWIA, we already know that this analysis is accurate.