Poor legal frameworks block African renewable energy plans

July 6, 2011 at 3:46 PM
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LAGOS, Nigeria, July 6 (UPI) -- Poor legal frameworks, issues of governance and inadequate safeguards for investors are hindering growth in Africa's renewable energy sector, despite perceived huge potential in the region.

Investors from Asia, the Middle East, Europe and North America are lining up to tap Africa's lucrative renewable energy resources. Many among them are spending huge sums upfront on research and on extracting assurances from governments on future investment.

In some cases, future investors are helping to create legal frameworks where none exist.

The International Renewable Energy Agency said it will host high-level consultations in Abu Dhabi, United Arab Emirates, this week in a bid to jump-start broad-based cooperation on accelerating renewable energy use in Africa.

IRENA said such cooperation was necessary to seize emerging opportunities to speed up work on developing the resource on the continent.

"The issue is not shortage of funds for investment, but rather the inability of African markets to attract a substantial share of that investment," IRENA Assembly President Sultan Ahmed Al Jaber said.

"This is largely due to a lack of coherent and consistent policies, technical, regional and institutional capacity, enabling mechanisms and regulatory frameworks, making the region comparatively unattractive for entrepreneurs and investors," Al Jaber said.

The consultations will be Friday and Saturday in Abu Dhabi and will follow on commitments made by a Capital Markets Initiative, programs called CoP-17, Rio+20, and the International Year of Sustainable Energy For All, set for next year.

IRENA officials said 45 African countries, including about 30 African ministers and assistant ministers, had said they would attend.

Representatives from the African Union and non-African delegates will include U.N. organizations, China, India, France, Germany and the United Arab Emirates.

The oil-rich Emirates has been in the forefront of recent initiatives on promoting renewable energy. In addition to being IRENA president, Al Jaber is the Emirates' special envoy for Energy and Climate Change and will be aided by IRENA Director General Adnan Amin.

The ministerial meeting aims to push for development of scenarios and strategies for Africa and to launch a continent-wide effort to prepare African economies to try and ease current constraints in the deployment of renewable energy.

IRENA's 2011 work plan gave the continent priority as experts noted that Africa, which represents 15 percent of the world population, accounts for only 5 percent of global primary energy use. However, nearly half of that is traditional biomass, a major cause of health problems and deforestation.

The deterioration in quantity and quality of power distribution networks is impeding African development, the experts found.

An African Development Bank estimate said Africa needs $27 billion a year investment to achieve its goal of universal access to reliable and cleaner, electric power in all 53 countries by 2030. Current investment in energy in sub-Saharan Africa reaches around $2 billion a year.

"There is great potential for capitalizing on renewable resources in Africa provided that the right enabling environment is created," Amin said.

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