Tuesday, 19 July 2022 17:02

UK plans to build wind farms and other new energy projects in South Africa.

Business Reporter.

The UK government has published a new case study on the various green business opportunities it is considering in South Africa and the rest of the African continent.

"Africa is one of the most vulnerable regions to the impacts of climate change despite having relatively low contributions to global emissions. It faces huge collateral damage posing substantial risks to its economies, food systems, and livelihoods, " it said.

"The UK, as a leading provider of green products and services, is in a strong position to help Africa seize the opportunity to build sustainable, green, inclusive and resilient businesses to drive the transition, which has become increasingly important in the context of climate change."

From an overall landscape of over 50 opportunities, the case study identified eight high potential areas that have the clearest potential for UK-Africa trade and investment. These are mainly in clean energy, agriculture, and green financing spaces. Opportunities exist most notably in six countries – Nigeria, Ghana, Kenya, Ethiopia, Egypt and South Africa.

"These opportunities tend to be less technologically advanced (eg waste reduction vs carbon emissions reduction), are at different levels of maturity and mostly in areas where Africa possesses a strong natural resource advantage. The environmental impact potential within the opportunity pipeline spans a wide range of outcomes from carbon emissions reduction, to strengthened adaptation and resilience, to waste reduction," it said.

Potential projects which were identified in South Africa include:

°Green Hydrogen production: This is expected to reach approximately 25% of global energy sources by 2050, with Africa having potential to take a significant share – especially in South Africa, Egypt, Morocco and Namibia. UK businesses are well placed to participate across the continent by providing capital to plants, as well as advisory services.

°On-shore wind farm development: Wind energy is set to grow from 2 Gigawatts in 2013 to 80 Gigawatts in 2030, with opportunities in South Africa and Egypt in particular. The UK is a global leader in the sector, and there is a strong opportunity for UK businesses to further increase investment in Africa for setting up/scaling up wind farms.

°Utility solar project development: There is an opportunity for UK firms to leverage their strong solar expertise to lead involvement in utility solar projects in countries such as South Africa and Egypt. UK investors can provide capital to set up and scale up utility solar projects to capitalise on the growing importance of solar in Africa’s total power mix and help to drive universal electrification.

°Green bond issuance: The Green bond market could reach £10 to £15 billion by 2030 as demand for sustainable financing increases. Positive development in South Africa and Egypt can serve as a proof-of-concept. The UK leads the green bond market globally, and UK banks and advisories can support issuances in Africa.

"Activating this opportunity pipeline has the potential to unlock sustainable gains in development impact across Africa, while also advancing the commercial interests of both African and UK businesses. Importantly, it would also play an important role in substantiating the UK’s ambitions to be a global leader in climate action," it said.

"Green businesses do not contribute any negative impact on the environment, economy, or community. They use environmentally sustainable resources and uphold socially responsible policies. Supporting the growth of such businesses has the potential to drive the creation of climate-smart jobs, boost economic growth and achieve sustainable development."