Progress toward achieving the Sustainable Development Goals (SDGs) by 2030 has faltered significantly, with only 17% of the SDGs projected to be realised by 2024, as the world struggles with the fallout of the COVID-19 pandemic, geopolitical tensions, and the worsening effects of climate change. Alarmingly, 17% of the SDGs have regressed below 2015 baseline levels and thus, meeting the SDG targets will now require annual investments of $5-7 trillion, up from the previous estimate of $3 trillion.

Despite these daunting statistics, Africa emerges as a beacon of hope, offering untapped potential in the energy sector to bridge the SDG gap. This therefore underscores the urgent need for innovative solutions and collaborative efforts in the African energy sector to turn back the clock.

Shining examples of Africa’s success in SDG projects

Africa’s leadership in renewable energy in recent years demonstrates the continent’s capacity to drive impactful SDG investments. Despite a notable nosedive in renewable energy investment in 2023, investors remain enticed by Africa’s renewable energy sector, as the indicative return profiles for this sector are among the highest. Particularly, countries such as Egypt, Mauritania, Morocco and South Africa, are at the forefront of Africa’s renewable energy, ensuring that wind and solar power dominates Africa’s renewable energy mix within the next 15 years.

In fact, despite receiving only 2% of global clean energy funding, Africa showcased groundbreaking SDG-related projects that inspire confidence in its potential. One of such projects is Morocco’s Noor Ouarzazate Solar Complex, the world's largest concentrated solar, producing 580MW of clean energy. This US$2.5 billion initiative is expected to yield 12% returns on equity while offsetting over 773,000 tons of CO₂ emissions annually, evidently exemplifying the continent’s ability to align investment returns with sustainable development.

Similarly, South Africa’s Kenhardt hybrid solar and battery facility – a combination of 540MW solar energy and 225MW/1140Wh battery storage – is alleviating the country’s energy crisis by serving South Africa national power grid 16.5 hours daily. More importantly, the project prevents 870,000 tons of carbon emissions each year, which further solidifies Africa’s role in combating climate change.

Emerging opportunities to close the SDG gap

Africa’s potential to attract impactful investments extends beyond renewable energy. Its unique geography and geology demographics, and responsiveness to global trends position the continent as a fertile ground for innovation across various industries with attractive returns for potential investors.

Sustainable Cooling: A Hot Market Opportunity

As global temperatures rise, sustainable cooling solutions are becoming a necessity. In fact, the International Finance Corporation (IFC) and the United Nations Environment Programme (UNEP) predict this market will increase from US$ 300 billion annually to US$600 billion by 2050, with Africa contributing over US$105 billion to this total. This emerging opportunity not only addresses heat-induced challenges but also offers significant energy savings, potentially reducing electricity bills globally by $5.6 trillion by 2050.

Beyond comfort, the sustainable cooling solutions also have critical applications in agriculture, minimizing food spoilage through improved cold storage. For investors, this presents a dual opportunity: generating attractive financial returns while addressing food security in vulnerable regions.

Green Hydrogen

Further, green hydrogen could become the longer-term cherry on the cake for Africa. This is primarily because green hydrogen has become the cornerstone of global decarbonization efforts, with about $30 trillion required globally for its production, transportation, and usage by 2050. Fortunately, Africa holds a unique competitive advantage in this area, making it an attractive prospect for foreign investors. Moreso, the continent’s abundant solar and wind resources make it a prime candidate to supply about 25-50% of the world's hydrogen.

Ironically, despite Africa's immense potential for green energy, a significant energy access gap persists across the continent. That’s right! The cobbler’s child has no shoes. This therefore makes it the opportune moment for Africa to capitalize on the growing foreign investment interest in green energy to bridge this wide energy access gap and to generate hard currency through exports. The good news is that countries such as Egypt, Morocco, Namibia, and Ethiopia are already leading the charge, crafting hydrogen roadmaps and establishing international partnerships.

The European Union’s goal of importing 10 million tonnes of green hydrogen by 2030 has prompted some agreements with Africa nations, setting the stage for Africa to become a global hub for clean energy export. In addition, Europe’s efforts to cut its energy dependence on Russia continue to inadvertently create opportunities for Africa. For instance, Senegal's FDI is forecasted to surge to about 9% of GDP in 2024, largely powered by the hydrocarbons sector. Similarly, investments in liquefied natural gas have elevated FDI in Mauritania and Mozambique to over 10% of GDP, while Namibia’s offshore energy discoveries have also begun to attract substantial investment.

Conclusion

In a nutshell, Africa’s journey to unlocking its SDG investment potential is a narrative of opportunity, resilience, and innovation. By scaling up its share of global energy funding and promoting industries like sustainable cooling and green hydrogen, the continent can become a mainstay of sustainable development.

Indeed, the road to achieving the SDGs by 2030 is steep, but Africa’s promise shines bright as it continues to prove that the key to a sustainable future lies within its borders. With the right policies, collaborative partnerships, and investments, this continent can transform the global SDG landscape.