African countries need to invest an estimated $2.8tn in a clean energy mix and reduce its current annual carbon dioxide emissions in order to achieve net zero by 2050, PwC has said in a new report.
PwC, in its Africa Energy Review 2021, noted that it had been estimated that achieving global net zero by 2050 would cost as much as $130tn, making it the single biggest global growth opportunity.
It said, “For those who can’t transition, it will however be a significant disrupter, with the risk of major stranded assets across the globe.
“A critical question yet to be answered is whether Africa will benefit from an equitable share in this global investment and growth or, lacking the economic strength, will continue to fall further behind global standards as outlined in the Sustainable Development Goals.”
According to the report, Africa still has significant untapped fossil fuel reserves, which could provide much-needed foreign direct investment and export revenue.
It said despite the clear and necessary long-term decline in demand for fossil fuels, shorter-term demand and prices remained buoyant, providing strong commercial justification for their exploitation and a necessity to smoothen the transition.
The report said notwithstanding the significant innovation and related cost reduction being realised from renewable energy technologies, the required capital investment for sustainable energy supply in Africa must cover the generation, much-needed sector reform as well as grid and utility strengthening.
“A conservative estimate done by PwC of the cost to achieve net-zero for Africa by 2050 is $2.8tn. Such investment levels are increasingly unaffordable for many African economies and increased reliance on international finance will be needed if progress is to be made towards sustainable access to affordable energy for all Africans,” it said.
PwC Africa Oil and Gas Industry Leader, Pedro Omontuemhen, in a statement, described the energy sector in Africa as diverse and characterised by different demands and needs in each country.
“While the energy journey for each country may be different, an overall perspective is needed on common issues in the bid to reduce the energy deficit on the continent,” he said.
The PwC Director, Energy Strategy and Infrastructure, James Mackay, said Africa must carefully consider the economic impact of a transition away from fossil fuels and associated revenues in context of the affordable pace of development and growth of the renewable energy sector.
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Publish date : 2021-11-10 23:03:01