There is more capital than there are ready renewable projects in Africa, according to the African Development Bank.
Speaking at the World Economic Forum on Africa in Durban, Amadou Hott, African Development Bank’s vice-president, said the continent was the most impacted by climate change yet it was not accessing the funds available for green projects. These projects could accelerate the economy.
“We see a lot of capital chasing few ready renewable energy projects. Many projects were not yet well structured to attract the investment. Strong governance, good governance, competent governance are absolutely important to attract capital and that way we can develop green projects,” Hott said.
This meant at this stage there was more money than could be given away.
“If we were able to develop all the projects that Africa needs, for example achieving universal access to electricity over the next ten years, we may have a gap in terms of capital. But today, we have more resources but we’re chasing few projects because developing projects take time and African countries are not ready,” said Hott.
Landry Signé, political science professor at Stanford University’s African Studies department, believes there cannot be economic growth without environment stability and sustainability.
To achieve this, there is a need for capital investment and technological innovation.
“Capital and technological innovations are extremely important and that is what we don’t have enough of in Africa. So although we can be enthusiastic about the environmental aspect determining economic growth – Africa has enough land, natural resources – we do not have enough capital but that’s because we are lacking in terms of technological innovation,” said Signé.
South African Reserve Bank governor Lesetja Kganyago said it was clear that green growth was no longer an option but a necessity. More so in a big emitter like South Africa; hard questions needed to be asked about why green finance was unreachable.