Stage set for crunch talks on bringing electricity to 300m Africans

More than two dozen African heads of state will convene in Dar es Salaam this week for a summit on the Mission 300 initiative established last year by the World Bank and African Development Bank. The aim is to agree a pathway towards meeting the initiative’s target to extend electricity access to 300m people in Africa by 2030.

While adding such a huge number of electricity connections in the space of just five years is ambitious, Andrew Herscowitz, CEO of the Mission 300 Accelerator set up by the philanthropic Rockefeller Foundation, tells African Business that is “quite achievable.”

A pipeline of 130 projects to create the required number of connections has already been mapped out, he reports.

The Rockefeller Foundation is one of several institutions supporting the implementation of Mission 300. The accelerator is serving as a technical assistance facility to help “jumpstart” the projects identified as helping to deliver the mission’s goals.

Herscowitz says Mission 300 will be unique in its “aggressive use of concessional funding”. While other initiatives have largely focused on mobilising private finance, this has led to growing concern among African governments funding energy projects is pushing them further into indebtedness.

In response, the World Bank and AfDB are scaling-up the use of concessional instruments through Mission 300. Herscowitz says that $30bn in financing is on the table in the form of “very, very low-cost loans and grants”. Some loans will have 40-year terms and interest rates as low as 1%. Philanthropic capital is also contributing t help “unstick deals”, he says.

Powering-up reforms

Herscowitz says that though much of the emphasis will be on concessional capital, African governments will also be under pressure at the summit to demonstrate their own role in getting projects off the ground.

“It’s not going to happen without the governments themselves making the political commitments, but also having some skin in the game,” he says. “It can’t happen only with World Bank and African Development Bank and philanthropic funding. We need to get the governments themselves to prioritise their own domestic resources to make this happen.”

He expects around 12 countries will enter into “energy compacts” at the summit, in which they will lay out reforms to boost generation, transmission and distribution, as well as measures to strengthen highly-indebted utilities and attract private sector capital. “This also doesn’t work if we can’t mobilise private investment as well. $30-billion of concessional capital is fantastic – but we need multiples of that to achieve the goal.”

Herscowitz says around half of the new connections delivered through Mission 300 will come through grid connections, while the remainder will be through mini-grids or solar home systems.

He says the initiative is largely taking a “technology agnostic” approach. “What’s important is that the power grid itself has the least expensive power available,” he argues, while pointing out that baseload sources of renewable power – in the form of geothermal or hydropower – are typically much cheaper than fossil-based alternatives. Strengthening interconnections between the continent’s electricity grids is a key priority, he adds, given the advantages of being able to transfer electricity generated from countries where renewable power is plentiful to those where it is lacking.

But Herscowitz is frustrated with activists who believe African governments can simply switch from fossil fuels to wind or solar. “This drives me nuts, because a lot of the big climate philanthropies are so heavily focused on the decarbonisation side, and I’ve actually seen very little progress. Everyone thinks that you can just flip a switch and go from coal to solar, and a lot of the people who push this don’t understand how energy systems work.”

Some form of baseload power is needed, he insists, to make an expansion of intermittent power sources viable.

“If you take like a country like South Africa, for example, it needs to retire it’s coal just because it’s dirty and it’s inefficient,” says Herscowitz.

“But they can’t just switch straight from coal to solar. They need other forms of baseload power so that they can continue to scale solar and to scale wind.”