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Big bucks and bigger ambition at the Africa Climate Summit

More than $1 billion in deals were announced on Day One. But the narrative alongside it was even more audacious

Hello - perhaps you saw Kenya’s president arrive at the summit in his new yellow limo (one battery, no previous owner). If the investments in climate action he lauded come off, you’ll tell your grandchildren one day. If not...

Today’s reading time: 6 mins

1. Forget victimhood: Ruto reframes Africa’s climate potential

The global fight against climate change can be a transformative engine for growth and prosperity in Africa. That was the message of African leaders at the start of the inaugural Africa Climate Summit in Nairobi.

Big money: Having registered around 30,000 delegates, the summit started with high ambition. Kenyan president William Ruto made a strongly worded case for reframing climate action as a "multi-billion-dollar" investment opportunity on the continent.

  • Talking points focused on investable innovation and green growth while mentions of climate justice were less prominent.

  • He suggested that "trillions of dollars globally are looking for green investment opportunities. Africa holds the key. It is a statement of fact. We are a powerhouse of potential."

In the lead: The president was speaking to an audience that included high officials from western governments and the UN, IMF and World Bank. He told them, "Africa holds the key to decarbonising the global economy. Africa possesses all the necessary resources."

The resources: At least four key "endowments" make Africa valuable to climate action and the decarbonisation of the global economy.

  • Renewable energy potential including solar and geothermal

  • Natural resources such as minerals needed in green technologies

  • Young and growing workforces while the rest of the world ages

  • Vast forests. "African carbon sinks are an economic gold mine," the Kenyan president said. "They have the potential for absorbing millions of tonnes of CO2 every year. We have the sinks to store the carbon produced by other continents - but we are getting nothing for it."

At home: Addressing his core African audience, the Kenyan president continued, "When you put all our natural assets on a balance sheet, you will know we’re a very wealthy continent."

  • He ended with a call to action: "The time has come for us to break out of the shackles of low ambition. We want more economic value from these opportunities."

The tone: The president's speech was a mix of bold certainty and magnanimous invitation.

  • “Past disagreements” were loudly set aside

  • "Victimhood" was marked as a dirty word

  • Multiple speakers embraced a “new narrative”

The cavalry is here: Perhaps no line in the president’s speech better sums up the change of attitude than, “We will assist the world to ensure we move towards the net zero target.”

Concrete steps: In return, African leaders seek a major revision in the terms of global investment on the continent. Mr Ruto spoke briefly but passionately about the cost of capital for Africa. He said,

  • International lenders and investors price “real but mostly perceived risk”.

  • “We pay as much as five times as advanced economies.”

What’s changed: At times divided in the past, African Union leaders appear to have consolidated their position ahead of the COP28 global climate summit in three months.

  • Youth climate leaders mostly supported the politicians’ focus on growth

  • Protesters outside the summit carried placards saying, “Less talk, more action”

In the tail: President Ruto shared a disguised warning with international delegates at the summit, ostensibly talking about the city of Nairobi.

  • "We keep the wildlife in our national park behind a fence,” he said, “but sometimes the animals break out. If you walk around you might encounter a lion that is not tame."

2. How to boost African carbon prices?

Demand in African carbon markets is estimated to have risen fourfold in the past year and continues to grow rapidly.

  • Exhibit 1: At the Africa Climate Summit in Nairobi, the UAE Independent Climate Change Accelerators (UICCA) pledged to invest $450 million in high-integrity and high-quality carbon projects in Africa.

  • Exhibit 2: On the same day, Climate Asset Management, a joint venture between HSBC Asset Management and the Pollination Group, announced a $200 million investment in nature-based solutions expected to generate high-quality African carbon projects.

The background: Leading consulting firms estimate Africa’s voluntary carbon markets will be worth between $40 billion and $100 billion by 2030.

What’s next: Players in the carbon market in Africa are seeking ways to get a greater share of the potentially lucrative market. That means higher prices.

The numbers: Carbon credits generated on the continent fetch relatively low prices compared to other regions. This is despite the fact that the continent boasts some of the world’s most significant carbon sinks such as the Congo Forest.

  • European carbon credits sell for over $100 per tonne.

  • African ones often sell for less than $10 (at a Nairobi auction in June, Saudi Arabian companies bought carbon credits for $6.27 per tonne, of which two-thirds may be swallowed by transaction costs.

How-to: By boosting prices as well as volumes in the continent’s carbon credits, the voluntary markets would go a long way towards boosting climate finance.

  • The Climate Policy Initiative last year calculated a gap of about $250 billion.

What’s possible: The African Carbon Market Initiative (ACMI), an industry body, projects by 2030 the potential to retire 300 MtCO2e, mobilise $6 billion in capital and create or support 30 million jobs.

  • To achieve this, public and philanthropic funds are needed, according to John Kerry, the US climate envoy, not least to draw in much greater private investment.

  • Mr Kerry said, “Africa can benefit only if the carbon market grows. It has to become a market in the billions to work effectively. For that we have to ensure the environmental integrity of that market.”

Bottom line: To boost integrity, ACMI is working with 20 African governments on carbon market regulation. Their incentive to act is clear:

  • “We stand on the brink of the greatest economic opportunity since the Industrial Revolution - an opportunity to build an entire new economy,” stated Mr Kerry.

3. The 3333% geothermal power promise

Steam stacks across the Rift Valley are set to grow exponentially. Serving the geothermal plants that power a significant part of the East African grid, the stacks will become increasingly numerous under a major new initiative.

The news: The Kenyan government has announced it will increase geothermal power output by 3,333%, growing capacity from the current 3 gigawatt to 100 gigawatt in 2040.

  • Kenya is already drawing about half of its electricity from geothermal (the highest highest share for any country in the world) and overall uses 93% renewable energy. The government said on Monday this will increase to 100% by 2030.

Investor pitch: President William Ruto told investors at the Africa Climate Summit in Nairobi: “Let me invite you to an unprecedented opportunity. We are ready.”

Industrial power: The geothermal initiative is part of a wider plan to foster climate-friendly growth. The plan is to support power-hungry manufacturing.

  • “Africa can be a green industrial hub,” the president said. “It has all the necessary sources of renewable energy right here.”

The region: Other parts of East Africa are catching up with Kenya on geothermal energy.

  • Ethiopia is not so far behind Kenya in terms of building capacity

  • Uganda and Tanzania are attempting to catch up

Why It Matters: Where available, geothermal is an effective climate solution. It is derived from the earth's internal heat, by pumping water to great depth.

  • In parts of East Africa, the plant’s molten core is only 2 km below the surface. Elsewhere, the lava is a lot further, making it uneconomical.

Behind the scenes: Geothermal has made a substantial impact in Africa.

  • Its capacity increased fivefold from 2011 to 2022.

  • But the commercial potential outside East Africa is so far unproven.

A recent announcement by a Russian company, RusHydro, to invest in 15 geothermal projects in Africa was not substantiated with any details.

4. Climate film premiere: ‘Between the Rains’ - a tale for all seasons

Between the Rains” won the prize for best documentary at the Tribeca film festival in New York in June. The raw cinematic exposition shows how the global climate crisis affects one African and his world.

Kolei, the protagonist, navigates personal grief and loss amid conflict within his community brought on by environmental catastrophe in the Turkana-Ngaremara area of northern Kenya.

Two of the producers grew up in the same community. As boys they lost classmates to the escalating violence around them, worked day and night to keep their family livestock alive and struggled with the decision whether to stay or leave their village and seek opportunities elsewhere.

Their input into the film gives it unusual depth and poignancy. “Between the Rains” has its official Kenyan debut on the opening night (tonight) of the Africa Climate Summit.

Premiere presented by Kenya Film Commission and Docubox screens: 7pm, Kenya House, KICC.

5. Media monitoring

  • The wrong kind of mobility: The World Bank predicts that 86 million will be displaced by climate change in Sub-Saharan Africa by 2050.

  • The right kind of mobility: Kenya gets more electric motorbikes thanks to Spiro. Another 10,000 down, about 2 million more to switch.

  • Rare alliance: Two French industrial giants, EDF and TotalEnergies, are teaming up to build the Mphanda Nkuwa hydroelectric dam on the Zambezi River in Mozambique.

  • Regulation rumoured: Local media in Cameroon is seeing the introduction of carbon market taxation.

Don’t have time to read 100+ media sources daily? We’ve done it for you ➡️ Check out our full media monitoring here

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