UN defends African national energy transition financing mechanism

The United Nations Economic Commission for Africa (UNECA) said this Wednesday that African countries must establish a financial mechanism at the national level, coordinated by the government or central bank, to finance the energy transition.

“Establish a national mechanism dedicated to financing a just and sustainable transition, supported by the central bank or the Ministry of Finance, to promote more efficient use of available finance,” says the policy recommendations of UNECa’s 2024 Africa Economic Report, entitled “Investing in a Just and sustainable transition in Africa.”

Throughout the document, UNECA analysts advocate the importance of ensuring a just energy transition that makes efficient use of Africa’s vast natural resources, especially those that will be fundamental to achieving greener economies and less dependence on fossil fuels such as cobalt. nickel or copper.

“African countries have great opportunities to transition to inclusive economies; Seizing these opportunities and moving towards sustainable development requires changes in interdependent social systems at many levels, from the functioning of global supply chains to the behavior and values ​​of individual citizens,” the report says. argues.

For UNECA, “these unprecedented transitions represent complex and uncertain processes that will depend on how well African policymakers understand the dynamics and deal with the key elements and drivers of the transition in the coming decades,” starting with the type of infrastructure each country has . will be necessary.

The Africa Economic Report 2024 sets out the conditions for investment in a just and sustainable transition that meets the African aspirations of the 2030 Agenda and Agenda 2063 to build a prosperous Africa in line with the Sustainable Development Goals . The transition from fossil fuels to renewable energy represents an unprecedented opportunity for the region.

African countries “can leverage the global boom in green minerals and their vast renewable energy sources, tropical forests and marine ecosystems to export carbon credits, generating finance for sustainable investments,” UNECA explains.

However, the institution warns that “increasing this type of investment will depend on the ability of African countries to mobilize the necessary financing from domestic and external sources, including climate finance.”

Key recommendations include strengthening national policies and strategies, increasing the role of the private sector, balancing growth and strategic public investment on the one hand, and managing fiscal sustainability on the other.

Another recommendation of the UN Economic Commission for Africa is to mobilize more funding through partnerships between different actors and to use the African Union’s presence in the G20 to voice its views on these initiatives.