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Research on Green Energy Cooperation with East Africa Energy industry

Author Munsu Kang, Yoon Jae Ro, Jeonghwan Yun, and Yejin Kim Series 22-11 Language Korean Date 2023.06.08

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Sub-Saharan Africa is under pressure domestically and from abroad to achieve both economic growth through better access to energy and a sustainable environment through decarbonization simultaneously. Africa has generated energy through renewable sources such as hydro-power and geothermal energy but demand for stand-alone energy generation has increased recently to improve access to energy in the rural areas. In addition, green energy has gained importance for rural energy access as the unit costs of solar and wind energy generation dropped rapidly. This research examines East Africa’s demand for green energy and current policies, together with cooperation measures in the international community, and analyzes reasons for applying solar energy technology through a case study designed to derive policy implications on Korea’s energy sector cooperation.

Chapter 2 examines the energy access and green energy development status of Africa on a state level. Access to clean energy for power and cooking have improved considerably across Africa but the absolute access rate remains low compared to other regions. The study further examines energy access and green energy policies for Uganda, Kenya and Tanzania in particular. The three countries all have policies to improve energy access especially for the rural areas, and have established rural energy administrations. They also seek to establish a foundation for rural energy access through small-scale energy generation by introducing stand-alone generation facilities in the rural areas, in addition to the conventional electrification policies. To this end, private sector participation in the energy market is crucial, and thus governments in the region seek to provide incentives for small-scale energy generation by private companies. In regard to policies, Kenya’s policy index is high while that of Tanzania and Uganda need improvement.

Chapter 3 derives implications for Korea by examining the cooperation strategies and policies of international organizations such as the World Bank and UNDP, as well as partner countries including the US and Sweden regarding the green energy sector in East Africa. The US seeks to increase the region’s generation capacity up to 30,000MW by 2030 and provides large scale support to Africa’s energy sector through its Power Africa initiative. Solar energy and wind power consists up to 33% and 15% each in the program, emphasizing the importance of green energy for the US. Kenya and Tanzania are the prime beneficiaries of the Power Africa initiative among the 30 countries in participation. EU’s Africa Europe Energy Partnership (AEEP) seeks to provide electricity to 100 million people by 2020 through hydro, wind and solar energy to improve green energy supply, strengthen energy security between the EU and Africa, and to increase energy efficiency in Africa. EU member countries have formed a Team Europe platform with institutions such as the European Investment Bank, and European Bank for Reconstruction and Development, through which it seeks to create a green energy initiative, as well as an environment for green energy production and investment. The World Bank and UNDP have led support to improve energy access and increase energy efficiency in Africa among international organizations. Support is given to hydro and offshore wind power as well as for stand-alone solar energy as access to electricity and the increase of green energy power generation have become the core objectives of these institutions.

Finally, Chapter 4 analyzes the reasons for solar lantern usage and draws implications for solar energy cooperation from the Tanzanian case study. The results indicate that high female participation in the Solar Cow project and the will to study were the main reasons behind solar lantern usage. However, some residents did not participate willingly in the project due to the charging policy. This shows that understanding the willingness to pay is as important as understanding the demands for green energy technology is crucial to increasing the effectiveness of the project. A pre-analysis of the recipients and some form of participation compensation is required when performing development cooperation projects for green energy.

Four implications can be drawn from this study. First, collaboration between East Africa and Korea is needed to improve the green energy policy environment in East Africa. Among the East African countries, Tanzania and Uganda’s institutional development is weak, while green energy related regulations and incentive policies need to be newly implemented. Institutions such as the Rural Electrification Agency and rural electrification policies have been established to provide the rural areas with electricity, but there is room for further collaboration in the actual implementation of these policies. Accordingly, cooperation on policy improvement to expand energy access and green energy adoption in rural areas of East African countries should be discussed.

Second, green energy related projects could be expanded. Korea only has a limited number of energy related projects in Africa, which are mostly in the form of loans. However, when looking at the electrification strategies of international organizations and partner countries using green energy, cooperation in the green energy sector can be expected to increase in the future.

Third, institutional mechanisms that promote the participation of energy companies and institutions are needed. This study suggests the expansion of financial support for companies investing in the African power market, the creation of an information sharing platform for the energy sector, and the increase of participation in the African power generation market as the main cooperation strategies.

Fourth, there is a need to diversify green energy cooperation. The demand for solar energy is generally high but that is the same for wind, hydro, geothermal and other sources. The efficiency of education and health-sector related projects can be improved by supporting energy access and generation of education and health facilities. There is a need to gradually expand cooperation on clean cooking energy sources, as it is also in high demand. Most importantly, a system to support human development and equipment management is needed once a projects ends for further maintenance.

Improving energy access and energy efficiency will continue to be important issues in East Africa. Support for the energy sector not only affects economic activities but also other sectors such as education and health care, and is expected to be further linked to gender inequality and support for the vulnerable. East Africa’s population in particular is larger than that of other regions in sub-Saharan Africa, and so is the demand for energy accordingly. In consideration, expanding energy cooperation between Korea and East Africa is expected to contribute to the socio-economic development of East African countries in the mid- to long-term.

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