Why and where to invest in Africa’s climate ecosystem

Are you looking for a punchy summary of how Africa can grow economically while playing a significant (and profitable) role in the planet’s green transition?

• Most of the facts below were aired at the Africa Climate Tech Summit this week. 

• Thanks to Cap-A, Dalberg Research, Catalyst Fund and Nairobi Climate Network. 

The basic premise: “Climate-positive growth” can take Africa to middle-income status by lowering emissions globally while creating new jobs and cash locally. 

• Preventing a climate catastrophe and realising growth were long assumed to be irreconcilable, suggesting sustained African poverty.

• But here is how experts think Africa can become well-to-do AND do well by the planet.

Africa in the global concert: Rich countries will pay the continent to focus on carbon. Why?

• Net-zero by 2050 is unlikely... unless poor countries provide big net-negative emissions.

• Rich countries are stuck in existing structures that mean they won't reach net-zero. 

Early evidence: Climate tech start-ups in Africa raised more than $1 billion in 2023.

• A third of venture capital coming to the continent now goes to climate companies. 

• Energy and water take the lion share but agri ideas hog the early-stage pipeline. 

Economic assets: Africa has three engines driving climate-positive growth.

• Adopting green tech to satisfy the continent's own demand for goods and services without increasing its carbon footprint.

• Adjusting local land use and ecosystem management, while applying engineered carbon removal technologies.

• Creating green manufacturing on the continent, using abundant renewable energy, to replace polluting industries in the Global North.

The likely result: Lower emissions globally AND more jobs locally.

The main driver: Renewable energy to power such climate-positive growth.

• Africa’s potential is 50 times the world’s estimated electricity demand by 2040.

Prime example: Solar PV in Kenya vastly outperforms Europe’s industrial centres.

• The same battery-supported PV system in Kenya will enable a base load that is 10 times that in Germany.

Industrial potential: Abundant renewable energy makes it possible to move production to Africa, especially the processing of raw minerals extracted on the continent.

• Locally smelting African bauxite would reduce global emissions by 335 million tonnes per year (about 1% of the total), creating 280,000 jobs and $37 billion in revenue (more than Zimbabwe’s entire GDP).

• Locally smelting African iron ore reduces emissions by up to 110 m tonnes/year, creating 215,000 jobs.

Leaping ahead: Emerging technology supports African green hydrogen production — running on seawater.

• This eliminates concern about water stress, and increases energy use by only 5%.

• Green hydrogen is a highly versatile industrial product suitable for direct export, green energy, industrial feedstock, fuel synthesis, green fertiliser, green steel, green chemical and green plastics production.

What if we don't do this? Climate change threatens Africa’s development and stability.

• Global warming will reduce African GDP by up to 15% per year by 2030.

• Limited buffer capacity means the poorest (and likeliest migrants) are hardest hit. 

• Growing Africa the standard way (like Asia) would create huge emissions growth.