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ADB discusses energy transition

2022-08-31  Staff Reporter

ADB discusses energy transition

A recent webinar hosted by the African Development Bank (ADB) brought together experts to examine how Africa can become a hub for manufacturing lithium-ion batteries to store energy and electrify the transport fleet.

The webinar, which was held during July 2022 under the theme, ‘Leveraging Africa’s Green Minerals for the Energy Transition: The Role Of Regional Integration and the AfCFTA’, is part of a knowledge series organised by the Bank’s African Natural Resources Management and Investment Centre, as well as the energy financial solutions
and  policy regulations department.

Representatives from the African Development Bank, the African Union’s Minerals Development Corporation, the African Continental Free Trade Area secretariat, Bloomberg NEF, the International Energy Agency and independent experts affirmed Africa’s opportunities given its rich endowments in lithium, graphite, cobalt, nickel, copper and rare earth minerals. All of these are essential for building the global green economy of the future and they also comprise new market opportunities for net-zero transitions. Vanessa Ushie, acting director of the bank’s African Natural Resource Management and Investment Centre, emphasised Africa’s potential in her opening remarks: “Given Africa’s competitive advantage due to rich endowments in renewable energy and green mineral resources, many African countries have a unique opportunity to benefit from low-carbon development and a just energy transition pathway appropriate to their national context.”

Jerry Ahadjie, chief minerals officer of the African Natural Resource Management and Investment Centre, presented some of the latest findings of the centre’s reports on the potential of green minerals in Africa, and specifically in the Democratic Republic of Congo. He called on African countries to develop a home-grown strategy to anchor the Africa Mining Vision to optimise benefits from the battery and electric vehicle value chain. Battery precursor production and two and three-wheel electrical vehicles are Africa’s low-hanging fruit, he said.

Marit Kitaw, interim director of the African Union’s African Minerals Development Corporation, said in light of the energy revolution and net-zero carbon ambitions. Mineral-based industrialisation in Africa is critical. “For Africa to develop, we have to industrialise.”  She stressed that policy was critical for quickly making this ambition real, adding that green minerals require bold industrial policies and policies to create local demand.

Kwasi Ampofo, head of metals at Bloomberg NEF, reiterated the real opportunity despite current drawbacks. “There is an opportunity for Africa, even though currently there is no cell manufacturing capacity on the continent today.” But Africa’s central location has many advantages, especially the AfCFTA. He reiterated that policies are needed to create demand for battery and electric vehicle products, taking Europe as an example.

International Energy Agency Africa Program manager Arnaud Rouget, presented some findings of work on green minerals, pointing out that the demand for critical minerals (including lithium, cobalt and nickel) will increase six-fold by 2040 as the world pursues its net-zero ambitions.

Demitta Gyang, senior advisor on customs and trade facilitation from the AfCFTA secretariat, explained how the AfCFTA agreement itself seeks to facilitate intra-African trade, from which the battery and electric vehicle value chain could benefit: “The agreement provides for a better business environment, by ensuring
that bureaucratic bottlenecks,
time and cost are reduced as goods move within the continent.” 

She also highlighted aspects of the agreement that support industrialisation and trading among African countries and the secretariat’s commitment to facilitating trade by eliminating non-tariff barriers: “The Secretariat is facilitating connectivity between the border crossings and harmonising border processes and procedures”.

Panellists included Callixte Kambanda and Samuel Otu from the African Development Bank, Themba Khumalo from the AfCFTA secretariat and independent extractives consultant Paul Jourdain. They shared their views on how Africa could position itself to localise the battery and electric vehicle value chain. Fred Kabanda, division manager of the African Natural Resources Management and Investment Centre moderated the two-hour session. 

Wale Shonibare, director of the bank’s energy financial solutions, policy and regulation department, concluded proceedings. Shonibare emphasised the need to mobilise finance to accelerate the development of battery storage and the electric vehicle value chain in Africa. “We have to put financial vehicles in place because the cost of capital is a challenge,” he said. 

He also advised the top African institutions - the African Development Bank, the AU and the AfCFTA secretariat - to mobilise and establish pan-African measures to harmonise standards, tax relief and free trade to realise this ambition.


2022-08-31  Staff Reporter

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