Access to sustainable energy to reduce inequalities: New partnership models

Innovating public-private partnerships to achieve large-scale and long-term solutions

Partnerships are a key driver to attain the 2030 Agenda for Sustainable Development. But they are not a silver bullet to fill investment gaps. Mutual interests and synergies must be carefully identified for businesses and governments to join forces. New operating and financing models must be developed to deliver concrete results. Participants will discuss new partnership models to provide access to sustainable energy at scale in developing countries, with a focus on Africa.

  • How to optimise processes for corporates and development organizations to work effectively together?
  •  How to move away from a piecemeal aid-based approach to full-scale public-private cooperation in the energy sector?
  • How to involve local players in a structural way, embedding transferrable skills in projects?

Key points

  • Access to clean energy is an enabler of sustainable development.
  • More than 600 million Africans lack access to electricity, the highest proportion of households without power in the world.
  • To share the benefits of clean, reliable electricity, new-style private-public partnerships must deliver small-scale, off-grid energy to rural communities - as well as large-scale generation and transmission infrastructure.
  • Action on the climate crisis overlaps renewable energy supply, with opportunities for Africa to bypass the worst fossil fuel polluters.
  • Sound regulatory and financial environments are both essential to persuade the private sector to take investment risks in Africa’s energy sector.

Synopsis

The public sector alone cannot deliver clean, renewable energy to more than 600 million Africans currently without access to electricity, the highest proportion of the population without power in any region of the world. Instead, development and energy experts are looking to a new generation of public-private partnerships to deliver a sound regulatory environment, and good financial governance. The objective is to unlock billions, if not trillions of euros of private investment in large-scale electrical generation and transmission infrastructure. These partnerships are seen by the development community as key drivers to achieving the 2030 Agenda’s sustainable development goal of universal access to clean energy. The new partnerships can act as a focus for innovative financial and operating models to help private investors to mitigate the risks of delivering both large-scale energy projects and small-scale, off-grid generation and storage. These small-scale projects are vital for rural Africa, which is often unlikely to have electricity. Technologies such as mobile phone banking have made payments from remote villages and homesteads possible. However, development experts say subsidies will be needed if marginalised communities are to benefit from the health, education and social protections provided by reliable supplies of electricity. Donor financial support and technical assistance will continue to feature in new-style public-private partnerships, with both the EU Commission and the World Bank’s Global Infrastructure Facility among their active supporters. The World Bank is also aiming to shift the debate about investment in Africa away from demands for more spending in favour of better targetted spending on services such as water, sanitation, irrigation and flood protection, as well transport and electricity infrastructure. The Bank’s recent Beyond the Gap report, for example, spelled out detailed scenarios for different infrastructure investment choices. The report concluded that with the right policies and targets, investment in fully decarbonised infrastructure by the end of this century “need not cost more than more-polluting alternatives.” Italian oil and gas firm ENI warns that becoming carbon-neutral will take time in Africa, although European Commission officials believe the region can bypass the worst fossil fuel polluters, and develop clean energy from hereon. In the meantime, public organisations and private businesses still have to find a common culture in to avoid white elephant projects of the past. Public-private partnerships will also have to move away from an aid-based approach to the energy sector and instead ensure that African resources and infrastructure are being managed by Africans for Africans.

Insight

The buzzword was “bankable”, with every power project – big or small – required to meet that benchmark to get the go-ahead.

Organised by

Speakers

Moderator
Sonja van Renssen
Freelance
Sanoussi Bilal
Head of Trade, Investment and Finance
European Centre for Development Policy Management
Alberto Piatti
Executive Vice President, Head of Sustainability
Eni S.p.A.
Jason Zhengrong Lu
Head of Global Infrastructure Facility (GIF)
World Bank
Megan Richards
Director - Energy Policy
European Commission DG ENERGY
Stefano Signore
Head of unit
European Commission - DG for International Cooperation and Development