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African Energy F utures

African Energy F utures. Mafalda Duarte African Development Bank. Outline. Africa Today Global and Africa’s Income I nequality Global and Africa’s Environmental Degradation Additional Challenges due to Climate Change How to Support Transformation What is needed Innovative finance

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African Energy F utures

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  1. African Energy Futures MafaldaDuarteAfrican Development Bank

  2. Outline • Africa Today • Global and Africa’s Income Inequality • Global and Africa’s Environmental Degradation • Additional Challenges due to Climate Change • How to Support Transformation • What is needed • Innovative finance • Opportunities in the Post-Rio+20 Landscape

  3. Africa Today: Continued and robust growth…but mostly driven by commodity prices

  4. Africa Today: Business climate is improving…but private sector still faces bottlenecks

  5. Africa Today: Poverty is falling but unequally

  6. Substantial But Uneven Progress Global Income Inequality Source: World Bank, World Development Indicators; OECD, DAC Statistics

  7. Africa Today: Massive infrastructure deficit

  8. Africa Today: Regional integration and intra-regional trade needs deepening

  9. Global EnvironmentalDegradation Climate Change Ocean acidification Chemical pollution (not yet quantified) Stratospheric ozone depletion Atmospheric aerosol loading (not yet quantified) ? ? Nitrogen cycle (biogeochemical flow) Biodiversity loss Phosphorus cycle Global freshwater use Change in land use Source: Rockström et al., Nature (2009)

  10. Additional Challenges Due to Climate Change Pictures: AfDB

  11. Impacts on water resources • Warming expected to increase up to 1.4 ° C by 2020; 5.1 ° C by 2080 • Increase in temperature = greater evapostranspiration; e.g. 1° C warming results 10% reduction in surface runoff (Morocco) • Changes in variability - more severe, intense, prolonged droughts and floods • Changes in groundwater recharge • By 2020, up to 250 million people in Africa are projected to be exposed to increased water stress

  12. Impact on Agriculture • Changes in pests, diseases, growing seasons, land-use • Temperature-induced crop yield losses of up to 16% per 1° C • Overall reductions of up to 22% across 5 crops • By 2020, yields from rain-fed agriculture could be 50% less in some countries, affecting food security and exacerbating malnutrition

  13. Impact on Coastal Zone and Marine Resources African Cities at Risk • 19 big cities (1 million +) in LECZ* • Mombasa: 17% city below 0.3m • Banjul:most below 1m • Egypt: 2 million people below 0.5m • Abidjan, Lagos at high risk • Marine Resources at Risk • 22 of 33 coastal countries “highly vulnerable” to CC impacts on fisheries are in Africa

  14. But Opportunities Too

  15. How to SupportTransformation

  16. How to Support Transformation • Infrastructure development $30-50 Billion Annual Gap 2% of Lost Annual GDP Growth • Improve transport & logistics chains • Meet rising demand for energy • Enhance water resources • Expand broadband telecommunications • Integrate urban infrastructure

  17. How to Support Transformation • Regional integration • Only 12% of Africa’s Trade is Intra-Regional • Hard infrastructure • Support soft infrastructure • Trade and Customs procedures • Movement of labor and capital • One stop border posts

  18. How to Support Transformation • Private sector development 50 million MSMEs 22% Access to Finance Low productivity • Improve investment and business climate • Expand access to infrastructure • Promote enterprise development • Improve access to finance • Scale up support to MSMEs

  19. How to Support Transformation • Governance & accountability 20% live in fragile states Weak institutions Poor service delivery • Build accountability: public spending, delivery • Support anti-corruption initiatives • Strengthen debt-management capacity • Promote fiscal decentralization • Bolster property rights, access to justice • Improve natural resource management

  20. How to Support Transformation • Skills & technology 250 million Africans between 15 and 24 15 million new job seekers annually • Build skills: science, technology, engineering • Support women in technical & scientific study • Support innovation & entrepreneurship • Develop networks of excellence and mentoring programs

  21. What is Needed Tailored strategies, Policies that promote smart behavior and tackle upfront capital constraints

  22. Innovative Finance • Focus on upfront financing: • Need for new sources, but also project preparation finance and risk-management schemes • Borrowing constraints • SMEs and local governments • Green finance, but also: • Leverage public and IFI resources: engage private banks; Fund-of-funds; buy down interest rates • Local public finance • Payment for environmental services

  23. Opportunities in the Post-Rio+20 Landscape • SDGs and the post-2015 int’l development agenda • “Shared prosperity” and the challenge and imperative of integrating sustainability into the poverty-centric MDG framework • Natural Capital Accounting (NCA) + WAVES • UN Statistical Commission adopted a System for Environmental-Economic Accounts, and 60+ countries embraced NCA at Rio • Data, tools and knowledge • Clear demand from advanced and developing countries for better information and methods and opportunities to share good (and failed) practices

  24. Targeting and Tailoring

  25. Thank You!! Mafalda Duarte m.duarte@afdb.org

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