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Africa will need financing of around $700 billion in the next decade to expand green energy development and the mining of key energy transition metals such as cobalt, copper, and lithium, a top executive at Africa’s top lender by assets said.
Hundreds of millions of people in Africa do not have access to electricity, and renewables could be part of the solution, analysts say. At the same time, Africa has resources such as cobalt in the Democratic Republic of Congo, copper in Zambia, platinum and manganese in South Africa, and lithium deposits in Zimbabwe.
The investment in further development of these resources and funding for more renewable energy power generation will have to come mostly from international investors and institutions because Africa’s banks will not be able to provide all the lending, South Africa-based Standard Bank Group says.
“Many of the minerals that are required to build solar panels, lithium batteries, wind turbines and so on, are found in sub-Saharan Africa,” Kenny Fihla, chief executive officer of Standard Bank’s corporate and investment banking unit, told Bloomberg.
“Our team has also quantified the amount of investment that is required in that space as in the order of hundreds of billions of dollars,” Fihla added.
Standard Bank itself expects to reach the “upper end” of lending – the equivalent of around $13 billion – for renewable energy by 2026, the bank’s executive said.
Standard Bank, however, has defended its role in funding fossil fuel projects.
The bank says that access to energy in Africa will continue to drive its support for fossil fuel projects.
“It is not possible for Africa and many of the African countries to ignore the shortage of electricity supply,” Fihla said in a recent interview with Bloomberg.
“Today’s challenges are not going to be resolved overnight and therefore a much more balanced approach is required,” the executive added.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.