Africa is likely one of the most weak areas to the impacts of local weather change regardless of having comparatively low contributions to international emissions. It faces big collateral injury posing substantial dangers to its economies, meals programs, and livelihoods. Essential challenges that African nations face from local weather change embody:
- the influence on meals safety and livelihoods from diminished agricultural manufacturing and productiveness
- the restricted entry to capital, know-how and expertise for financial adaptation and transition
- restricted governance and institutional capability to cope with battle over scarce assets and displacements arising from excessive local weather occasions
Whereas these challenges are extreme, African nations have a possibility to be an vital a part of the answer to the local weather change problem and contribute in the direction of international Internet Zero. This may be by way of unlocking the potential of renewable vitality, local weather good agriculture and good manufacturing, as an illustration. The UK, as a number one supplier of inexperienced services and products, is in a powerful place to assist Africa seize the chance to construct sustainable, inexperienced, inclusive and resilient companies to drive the transition, which has turn into more and more vital within the context of local weather change.
Inexperienced companies don’t contribute any damaging influence on the setting, economic system, or neighborhood. They use environmentally sustainable assets and uphold socially accountable insurance policies (Harvard Enterprise Faculty, what does “sustainability” imply in enterprise? October 2018).
Supporting the expansion of such companies has the potential to drive the creation of climate-smart jobs, enhance financial progress and obtain sustainable improvement.
This brief Development Gateway undertaking thought of 8 matter areas and greater than 30 sub-sectors throughout the broader inexperienced enterprise house. Three dimensions have been used to pick out focus sub-sectors:
- Africa structural benefit: is business potential on the continent already confirmed, or are the appropriate situations in place?
- UK comparative benefit: do UK companies have a powerful right-to-play and right-to-win?
- influence potential: what’s the potential environmental, social and financial influence?
Inexperienced commerce and funding alternatives
From this total panorama of over 50 alternatives, the undertaking recognized 8 excessive potential areas which have the clearest potential for UK-Africa commerce and funding. These are primarily in clear vitality, agriculture, and inexperienced financing areas. Alternatives exist most notably in 6 nations – Nigeria, Ghana, Kenya, Ethiopia, Egypt and South Africa.
These alternatives are typically much less technologically superior (eg waste discount vs carbon emissions discount), are at completely different ranges of maturity and principally in areas the place Africa possesses a powerful pure useful resource benefit. The environmental influence potential throughout the alternative pipeline spans a variety of outcomes from carbon emissions discount, to strengthened adaptation and resilience, to waste discount.
The best alternative areas embody:
Clear vitality Funding alternatives
- Inexperienced hydrogen – South Africa, Egypt, Morocco, Namibia
- On-shore wind farm advisory – Egypt
- On-shore wind farm undertaking improvement – South America
- Residential and Industrial & Industrial (C&I) photo voltaic programs – Nigeria and Kenya
- Utility photo voltaic initiatives – South Africa and Egypt
Agriculture Funding alternatives
- Sustainable animal feed – Kenya
- Tech-enabled micro storage – Kenya and Nigeria
- Tech-enabled chilly storage – Egypt
Inexperienced financing Funding alternatives
- Carbon credit score era (eg forestry, gas switching) – Kenya, Tanzania, Namibia and DRC
- Inexperienced bond issuance and advisory – South Africa and Egypt
Inexperienced hydrogen manufacturing
That is anticipated to succeed in roughly 25% of worldwide vitality sources by 2050, with Africa having potential to take a major share – particularly in South Africa, Egypt, Morocco and Namibia. UK companies are nicely positioned to take part throughout the continent by offering capital to vegetation, in addition to advisory providers.
On-shore wind farm improvement
Wind vitality is ready to develop from 2 Gigawatts in 2013 to 80 Gigawatts in 2030, with alternatives in South Africa and Egypt specifically. The UK is a world chief within the sector and there’s robust alternative for UK companies to additional enhance funding in Africa for establishing / scaling up wind farms.
Distributed photo voltaic vitality options
Photo voltaic vitality is poised to play an integral half in Africa’s electrification journey. The UK is well-positioned to spend money on residential and Industrial & Industrial (C&I) options, particularly in markets comparable to Nigeria and Kenya.
Utility photo voltaic undertaking improvement
There may be alternative for UK companies to leverage their robust photo voltaic experience to guide involvement in utility photo voltaic initiatives in nations comparable to South Africa and Egypt. UK traders can present capital to arrange and scale up utility photo voltaic initiatives to capitalise on the rising significance of photo voltaic in Africa’s complete energy combine and assist to drive common electrification.
Sustainable animal feed manufacturing
UK demand for sustainable feed (eg insect-based) is ready to develop considerably within the subsequent 30 years and Africa presents an excellent alternative for traders. As an example, black soldier fly larvae, ate up agricultural waste, present vital feed for the aquaculture sector. This presents an excellent alternative for UK traders to supply progress capital to native producers in nations comparable to Kenya.
Tech-enabled micro-storage
Urbanisation and inhabitants progress is driving demand for tech-enabled micro storage in markets comparable to Nigeria and Kenya, and rising demand for chilly storage from the aquaculture sector in Egypt. UK traders can present progress capital to companies in these markets.
Carbon-credit producing initiatives
Initiatives in Africa could be far more value environment friendly than within the UK, the place the fee per tonne of carbon credit score era is 24 occasions increased than the worldwide common. UK traders can finance such initiatives (eg forestry, gas switching) in markets like Kenya, Democratic Republic of the Congo, Namibia and Tanzania.
Inexperienced bond issuance
The Inexperienced bond market might attain £10 to £15 billion by 2030 as demand for sustainable financing will increase. Optimistic improvement in South Africa and Egypt can function a proof-of-concept. The UK leads the inexperienced bond market globally, and UK banks and advisories can assist issuances in Africa.
- Really useful options to boosting inexperienced enterprise participation in Africa
assist UK traders to attach with high-potential African initiatives and companies, speed up commerce schemes, and lift consciousness of alternatives and success tales - governments and companies might co-create undertaking aggregation mechanisms and joint funding rounds to enhance scale and danger mitigation, to handle the small measurement nature of alternatives and markets in Africa
- multilateral organisations and Growth Finance Establishments (DFIs) can discover low-cost native forex loans and reasonably priced overseas trade hedging merchandise
- assist data trade programmes and scalable pilot initiatives and provide technical help to African governments to assist with coverage and regulatory framework improvement
- UK companies, incentivised by authorities, might spend money on catalytic infrastructure (eg pipelines and grid infrastructure), to enhance alternative viability and unlock them at scale
Activating this chance pipeline has the potential to unlock sustainable positive aspects in improvement influence throughout Africa, whereas additionally advancing the business pursuits of each African and UK companies. Importantly, it might additionally play an vital function in substantiating the UK’s ambitions to be a world chief in local weather motion.
To activate the pipeline, info sharing and focused matchmaking for companies, coverage advocacy, technical help and catalytic investments (from companies, and probably additionally by UK authorities) is required to unlock alternatives.
This can assist to extend commerce and funding within the inexperienced sector. Preliminary successes will show the worth to extra UK and African gamers of alternatives which generate optimistic environmental and social outcomes, and spur additional offers organically. Development Gateway will facilitate this by way of focused info dissemination and enterprise networking occasions engagement with different UK Authorities organisations offering export recommendation and finance, and thru ongoing advisory assist.
To seek out out extra about Development Gateway and find out how your small business can become involved in these inexperienced UK Africa commerce and funding alternatives, contact [email protected] or go to our web site at growthgateway.marketing campaign.gov.uk
