The Africa-EU Energy Partnership released the ‘European Financial Flows on SDG7 to Africa’ report.
It finds that the cost of inaction is far greater than the cost of achieving SDG 7 – both in terms of the risk posed to achieving other SDGs, and in financial terms.
Africa and Europe are already working well together to make universal energy access a reality.
By Fiona D. Wollensack-Boult, AEEP Secretariat
As the world prepares to convene the first UN High-Level Dialogue on Energy in 40 years, attention is focused on the importance of achieving universal access to affordable, reliable, sustainable, and modern energy. A new analysis by the Africa-EU Energy Partnership (AEEP) sheds light on progress toward achieving this in Africa, and what still needs to be done to achieve SDG 7 in the years ahead.
Achieving SDG 7 in Africa is a sound investment, costing less than the amount lost each year to power outages and electricity inefficiencies.
On 31 August 2021, AEEP released the ‘European Financial Flows on SDG7 to Africa’ report. Looking at official development assistance (ODA) data and private sector investments over recent years (2014-2019), the report finds that while a lot remains to be done, SDG 7 is achievable in Africa. And, importantly, the cost of inaction is far greater – both in terms of the risk posed to achieving other Sustainable Development Goals (SDGs), and in financial terms. Drawing on the IEA’s Africa Case Scenario, an additional €69 billion is needed on average annually to achieve SDG 7. For context: That equates to 3.1% of Africa’s average annual GDP, or 0.5% of EU GNI. With some 2% of GDP in sub-Saharan Africa already lost per year from power outages, and 4% from electricity inefficiencies, it is clear that energy is both profoundly needed and a sound investment.
Our look at overall energy investment in the region shows that African governments and institutions are leading the way to achieving their energy goals. In 2019 alone, African governments and developments banks spent €12.7 billion of public spending on energy in all its forms, with €10.1 billion of public sector expenditure financed by government revenues and debt. These strong public commitments show the central role that energy plays for many countries.
Significant support dedicated to achieving SDG 7 in Africa has come from European Institutions and Member States, who contributed €11.1 billion of the €24.4 billion total official development assistance disbursed from 2014-2019. Multilateral institutions were the second-biggest supporter of SDG 7 in Africa, with €8.4 billion of all commitments – and a substantial proportion of these organizations’ funding coming again from European Institutions and Member States.
Through targeted and tailored approaches, European Institutions and Member States have been able to focus their support to SDG 7 in Africa where it is needed the most, and tailored to each country’s and its energy market’s needs. For example, some 61% of European ODA disbursements to least developed countries (LDCs) were grants, while only 10% of ODA disbursements to upper-middle-income countries was in the form of grants – approximately 90% were loans.
Additionally, where loans were extended to LDCs, they enjoyed the highest grant element – around 53% as opposed to just a 30% grant element for loans to upper-middle-income countries. This differentiated form of support reflects the relative maturity of markets, the different roles the private sector plays in countries, and the European commitment to provide the kind of support needed for achieving SDG 7.
As participants of the UN High-Level Dialogue on Energy announce their energy compacts and SDG 7 receives renewed political attention, it is clear that Africa and Europe are already working well together to make universal energy access a reality. More remains to be done – especially to achieve the twin ambitions of universal energy access and a net zero future – but the existing commitments and partnerships represent a valuable asset for scaling up action to achieve SDG 7 in Africa.
Find the full report and engage with the data at: sdg7.africa-eu-energy-partnership.org. Learn more about the implications of the report’s findings against the backdrop of the UN High-Level Dialogue on Energy at the AEEP Energy Talk on 29 September.
This guest article is authored by the Secretariat of the Africa-EU Energy Partnership (AEEP). Established in 2007, the Partnership facilitates the achievement of universal access to affordable, sustainable and modern energy in Africa. The work of the Africa-EU Energy Partnership is guided by its Steering Group, currently comprised of the African Union Commission, Common Market for Eastern and Southern Africa, Egypt, the European Commission, Germany and Italy.