As the UN Climate Change Conference COP26 continues in Glasgow this week, Maris Head of Renewables, Harry Minter considers the crossroads Africa finds itself:
If the international community is going to secure global net zero greenhouse gas emissions by mid-century, the well-trodden get-dirty, get-rich, get-clean path to industrialisation will not be an option for African nations. As Arkebe Oqubay, Senior Minister and Special Adviser to the Prime Minister of Ethiopia, put it ‘economic development which destroys the environment is no longer a real option.’ Green growth is the only path ahead.
Feeling the Impact of Climate Change
The injustice of this situation is clear: Africa played very little part in creating the climate crisis, yet, according to Vera Songwe, Executive Secretary for the UN’s Commission for Africa, ‘it is expected that, in the future, African counties will be spending about 15 per cent of GDP to respond to climate crisis.’
At Maris we have repeatedly felt the negative impact of climate events. Our five Mozambican businesses were directly affected when cyclones Idai and Kenneth hit within six weeks of each other in 2019. Similarly, flash floods in the horn of Africa have more than once impacted operations at Maris’ solar plants in Somalia. In each case logistics for the affected companies became more challenging, less efficient, and more expensive. Staff absenteeism increased, equipment was damaged, business productivity decreased, and project income fell.
We are not alone. The CDC recently carried out a survey of the senior management of its Africa-focused investment funds. The results revealed that 48 per cent of participants had experienced an extreme weather event which had significantly impacted their company.
Embracing a Green Industrial Revolution
Devastating weather events will not be the only consequence of unchecked climate change in Africa. As global economies undergo structural changes towards decarbonization, African nations are also at risk of negative economic consequences including reduced financing options and emissions-related export penalties.
But the climate crisis also presents compelling opportunities. Africa can leapfrog more developed nations and grow low-carbon industries from the ground up, thus side-stepping the expensive transition from fossil fuels to renewables that the developed world is currently having to navigate.
To drive this economic growth and contribute to the green transition, the continent must look to leverage its enormous renewable energy potential and its rich natural capital endowments responsibly and strategically. In addition to reducing their own emissions, richer nations must follow-through on their commitments to both financial and non-financial support for climate change adaptation for African countries. Given Africa’s debt burden has already risen in the wake of Covid-19, financial commitments must be affordable and allow African countries the fiscal space to scale up investment in climate change action.
While it is disappointing that developed nations have officially delayed their pledge to meet the pre-2020 climate finance gap of $100 billion per year to 2023, it is encouraging to see that 500 global financial services firms agreed to align $130 trillion – some 40 per cent of the world’s financial assets – with the climate goals set out in the Paris Agreement.
Maris Supporting Green Economic Transformation
At Maris, we strongly believe that the finance industry must drive the effort beyond what developed nation states can do alone.
This is why in 2016 we launched Equator Energy, East Africa’s market-leading commercial and industrial solar company, which is playing a crucial role in helping East African nations to achieve a green economic transformation. By providing fully financed solar solutions, its industrial clients benefit from cleaner and more affordable energy – reducing their operating overheads while significantly reducing their carbon footprint. Equator Energy saves a huge 32.4 million kilograms of CO2 across its solar plants and generates a total commercial saving to its clients of 3.9 million USD per year, figures which will double within the next two years.
Similarly, Maris is investing in the nascent electric-mobility sector in Kenya. e-Zuri will provide a cleaner and more affordable transport ecosystem consisting of electric motorcycle-taxis, smart batteries, and the associated infrastructure of intelligent battery swap stations. These innovations reduce carbon emissions, have a positive social impact, and provide compelling financial returns at scale.
With the right support from a variety of stakeholders, including governments, investors, businesses, international finance institutions, and civil society, African countries can carve out a path that respects planetary limits while meeting economic imperatives – driving faster growth in a greener global context.