Africa’s Future Counts: A Nexus Perspective to the Energy Access Challenge

By Ana Rovzar and Roberto Vigotti

Water, energy and food are the building blocks of development and essential for human wellbeing, poverty reduction and sustainable economic growth in Africa. Energy is deeply interwoven with other sectors that are fundamental to human, agricultural and industrial development across the continent. Africa’s future counts on ensuring access to water, energy and food resources, for which renewables can play a strong role. The Water-Energy-Food Nexus represents a strategy to accelerate access to clean energy as a foundation for inclusive and sustainable growth in Africa.

Africa stands at a new dawn of empowerment as it transforms into a continent of growth and opportunity. Across the continent, albeit at different speeds, African countries are experiencing expanding economies, rising populations, fast-paced urbanisation including young, entrepreneurial and digitally-savvy start-up scenes, a growing middle class and corresponding lifestyle changes.

While this growth is encouraging, it does not come without hurdles, with many Africans facing a “triple growth challenge”To this day, hundreds of millions of Africans across the continent still lack reliable access to vital resources such as water, energy and food. As African societies and economies continue to grow, urbanise, and change lifestyles, so the demand for these basic resources will multiply, while Africa’s vulnerability to the impacts of climate change will add further stress to infrastructure and resource scarcity.

However, this also represents a unique opportunity to build with the future in mind. Households, communities, businesses and economies all stand to be empowered in the coming decades through leapfrogging to better systems and solutions, with sustainable development as touchstone.

OpenAfrica (2018) by RES4Africa Foundation

Access to affordable, reliable and clean energy is paramount to ensure Africa’s sustainable development. There is no doubt that renewable energy technologies in particular, due to their vast resources, cost-effectiveness, modularity, and scalability, present an effective strategy to drive Africa’s clean energy transition. With a little more than 10 years to reach the Sustainable Development Goals by 2030, achieving SDG 7 in Africa has never been more urgent, while renewable energy solutions have never been better suited to make it happen.

Grand challenges require grand strategies. Reaching universal access to energy in Africa requires a scale-up and mobilisation of investment, which cannot be achieved without private sector involvement and financing. Given the scale of the challenge, universal electrification in Africa should rely on a combination of multiple and diverse technological solutions to deliver competitive and reliable energy to communities who need it the most in urban, peri-urban and rural areas. We will need to rely on on-grid large scale generation, decentralised off-grid applications, enhanced transmission and distribution solutions, as well as grid expansion.

But we also need to think outside of the box. Energy access can achieve more than we may think. Along with water and food, energy is one of the building blocks of development, and access to these resources is essential for human wellbeing, poverty reduction and sustainable economic growth. Energy is deeply interwoven with these other sectors that are fundamental to Africa’s human and industrial development. These complex interrelations between resource and supply systems are captured by the Water-Energy-Food (WEF) Nexus. Such sectoral interdependencies are particularly challenging in Africa where widespread resource infrastructure is still lacking, hampering agricultural productivity, industrial development, and poverty alleviation. Indeed, Africa’s future counts on ensuring access to energy, water, and food resources, with a strong role therein for renewables.

The WEF Nexus offers us an innovative perspective on the wider impacts of approaching the energy access challenge in Africa by considering how energy can both enable development and solve resource challenges. If powered by renewable energy technologies, the approach can inspire investment cases and business models that account for ways in which energy can mitigate resource needs and enable sustainable, productive uses of energy in high-potential economic sectors in African markets, such as water and agri-business.

OpenAfrica (2018) by RES4Africa Foundation

If taken to scale, the WEF Nexus approach has the transformative power to build new energy access markets and to enable virtuous cycles for development impact that is needed to meet the SDGs by 2030Firstly, renewables-powered integrated business models can trigger captive bottom-of-pyramid energy demand and enhance investor attraction towards energy access markets, while also improving resource management, productivity and efficiency of value chains. Secondly, these models can advance agricultural productivity, enhance local economic diversification, increase communities’ purchasing power, engender local development spillover effects, and reduce greenhouse gas emissions and pollution.

WEF Nexus integrated business models in Africa are emerging and the benefits seem to translate into reality when implemented. At RES4Africa, we explored the added value of a renewables-based WEF Nexus projects in a preliminary study with a cost-benefit modelling exercise of an integrated business model in rural Tanzania. Results indicate that over a long-term lifespan, renewables-based integrated multi-service projects have more than twice as much economic impact on a local community than the provision of energy alone. Moreover, the integrated approach enables a multiplier effect that increases local purchasing power, translating into improvements in other socio-economic areas. Specifically, the biggest benefits were increased access to better education, improved agricultural productivity, and time saved from having water and energy access on site. These results help make the case to support the expansion of such projects in order to bring their benefits to scale.

Private energy actors need to consider the WEF Nexus in their central role to solving Africa’s energy access challenge. Private players should consider WEF Nexus strategies in order to overcome barriers they face in energy access markets and to create new spheres of economic impact. The Nexus represents an opportunity for companies to create value by solving social needs – the true calling of business-led impact in the 21st century. Companies can do well by doing good, and economic growth benefits business development in a reciprocal manner.

Today’s challenges can no longer be understood through the silo-ed prisms of the past, and Africa’s energy access challenge is no exception. The paradigm shift lies on the idea that energy enables development and is interlinked with other key sectors, which creates opportunities for market and business growth as well as for virtuous sustainable development cycles.

OpenAfrica (2018) by RES4Africa Foundation

Scaling up the Nexus and its benefits requires more inclusive partnerships and cross-sectoral collaboration. RES4Africa’s inclusive partnership model looks at the landscape of relevant actors active in this field and proposes to forge inter- and intra- sectoral relations based on each actor’s comparative advantages, by ultimately creating a fruitful ecosystem of stakeholders seeking to bring such renewables-based nexus models and its benefits to scale.

Realising the benefits from scaling up the WEF Nexus approach can be achieved through a number of next steps:

  1. The WEF Nexus approach should be mainstreamed across the energy access field. At a broader stage, this also means ensuring coherence across the policy-technology-business interface and strengthening effective and inclusive institutions for implementing cross-sectoral integrated solutions.
  2. Adequate and well-directed financing for Nexus projects in Africa should be mobilised, and existing renewables financing programs should earmark supportive financing for WEF projects.
  3. Information gaps must be filled regarding the prevalence, implementation, and impact of Nexus projects by channeling knowledge and expertise, investing in data, and sharing success and failure stories that can be transferred.
  4. This should be complemented by enabling WEF business environments with the right incentives, rules and regulations that maximise synergies and encourage business models to come to life while alleviating the trade-offs.
  5. Going forward, all energy access capacity-building programs should include a WEF Nexus focus to ensure that inter-relational approaches become standard thought and practice.
  6. Finally, energy access leaders should champion inclusive partnerships on WEF Nexus projects by teaming up with actors across and beyond the energy access landscape to embark on new types of partnerships that pursue the scale up of Nexus projects.

Connecting the dots between the water, energy and food sectors have a tremendous potential to achieve the transformational growth that Africa needs and sets us on a roadmap towards sustainable prosperity for communities, businesses and economies.

Africa’s future counts on it.