African Leadership in the Net-Zero Economy
The global discourse around energy and climate has often presented a false dichotomy between economic development and environmental sustainability. However, Africa stands at a pivotal moment where it can redefine this narrative and emerge as a leader in the sectors that will shape the net-zero economy of the future.
A comprehensive report from RMI and Third Derivative highlights how African nations are uniquely positioned to leverage cutting-edge technologies across various sectors, such as energy, industry, agriculture, and carbon management. The continent’s wealth of renewable energy resources, abundant mineral deposits, biogenic carbon stocks, nutrient-rich soils, and a rapidly growing, educated, and enterprising workforce positions Africa to meet the rising demand for various products while simultaneously reducing its reliance on imports.
Unlike regions burdened by outdated systems, Africa has the opportunity to innovate and develop next-generation industries built on emerging climate technologies. The future hubs of energy and industrial advancement are not limited to established centers like Silicon Valley or Beijing; they can thrive in African cities such as Accra, Lagos, and Nairobi.
However, these aspiring entrepreneurs face significant challenges. Current investment levels in climate technology startups are less than one-tenth of what is needed. Founders struggle with minimal early-stage financing, lack of research and development funding, and access to capital that is both scarce and often prohibitively expensive. In addition, the slow pace of development finance institutions (DFIs) and donor-driven funding complicates the landscape for innovation.
The accompanying diagram illustrates how emerging technologies interconnected within energy, agriculture, and industrial value chains can deliver high-quality products both for African consumers and international markets.
New Opportunities in Climate Technology
The report identifies several promising climate technology avenues for Africa, such as green cement, eco-friendly fertilizers, clean industrial heating solutions, advanced geothermal applications, and intelligent, interconnected energy grids. It also proposes seven actionable strategies to expedite the development and implementation of these technologies.
The recommended strategies include:
- Enhancing support for idea-stage research and venture development within Africa.
- Creating pooled investor resources for research, due diligence, and risk mitigation.
- Establishing a consortium of partners dedicated to enterprise development and market access.
- Offering financial incentives that entice global startups to enter the African market.
- Setting up low-interest local currency debt facilities.
- Building a ‘Project Developer-as-a-Service’ model for seamless project execution.
- Forming a specialized ‘Deal Team’ to bridge Africa’s climate finance gap for complex projects.
These initial strategies serve as a springboard for discussions and collaborations. There is ample capacity for innovative ideas and additional input as the plans progress. Engagement and partnerships are welcomed; interested parties can reach out to Andrew Allee at aallee@rmi.org.
Acknowledgment:
This report is grounded in research and discussions funded by the Rockefeller Foundation. The views expressed belong to the authors and do not necessarily reflect the Foundation’s stance or policies.
We extend our gratitude to the representatives from various organizations who contributed their insights and commitment to this collaborative endeavor, including Africa Climate Ventures, ArcelorMittal, Aspyre Foods, BasiGo, Blue Haven Initiative, Beacon Power Services, Bezos Earth Fund, Breakthrough Energy Ventures, Climate Action Platform – Africa (CAP-A), CrossBoundary Group, Dalberg, Delta40, Factor E, GoogleX, HSBC, Kenewendo Advisory, Mosaic, Powerhouse, SunFi, Third Derivative, Temasek, the Lemelson Foundation, the Rockefeller Foundation, and Valo Ventures.
Additional contributions from RMI include the efforts of David Hynek, Anton Krimer, Ije Okeke, Lindsay Rasmussen, Emily Rogers, Alexander Hogeveen Rutter, and Scarlett Santana.
