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Africa in the new energy century

Aspenia talks
Rome, 27/09/2017, Aspenia

Africa is changing. Some countries are growing and forging ahead, while others are moving more slowly. The whole continent has major potential, and yet it often remains unfulfilled. The most important thing in the midst of this change is to envisage a sustainable scenario. Updated legal systems are crucial to any future progress: without regulations, it is more difficult to attract private investments. Innovation must also be an ingredient of this progress and the way business is done needs to be tweaked. This applies particularly to the strategic energy industry. In this sector, the right approach is to find a suitable mix prominently featuring renewable energies, whose costs are currently falling sharply.

Africa's strategic importance in this new energy century was recognized some time ago. China, in particular, has invested $78 billion in renewable energies; the United States, with $46 billion follows. China's approach is open to criticism in some respects, but it has had the great merit of placing Africa back in the center. This is why Europe, too, must abandon its traditional post-colonial and vaguely self-righteous approach in favor of greater realism.

For more than 30 years, Africa virtually disappeared from history and geopolitics, not to mention the media. We need to look at Africa within its new context. Africa is not only a source of fear – on account of the exponential growth of migration – but it is also a crucial geopolitical entity. This has been recognized by Turkey, which has opened 30 new embassies in Africa. Italy, too, has recognized the fact, and has more businesses operating in Africa than any other European country. Furthermore, Italy's development cooperation model has changed. No more generous largesse towards local leaders, yielding doubtful or nonexistent returns, but funding for projects, business contracts, and visits by business delegations to African countries. Overall, Europe has already invested $40 billion on the continent.

Morocco offers an interesting model in this context. The North African country imports 97% of its energy, 95% of it in the form of fossil fuels. In recent decades, Morocco has adopted a new energy plan that has led to an increased use of renewable energies. The country now has one of the world's largest solar power plants, and its gas consumption has increased.

Africa remains fragile of course: apart from the shortcomings of its reference legal systems, national monopolies are still too strong and per capita incomes are still low, while storage costs remain high. Access to finance is still limited and players are now calling for greater commitment from the international financial institutions.