Co-sponsors: Power Shift Africa, Recourse, Big Shift Coalition, MENAFem, SYND.

Moderator:

• Fran Witt, Program Director, Ecological Justice, Recourse

Panellists:

• Dean Bhekumuzi Bhebhe, Senior Just Transitions & Campaigns Advisor, Power Shift Africa
• Karabo Mokgonyana, Renewable Energy Campaigner, Power Shift Africa
• Jay Heimbach, Vice President, External and Corporate Relations, World Bank Group
• Mariana Paoli, Global Advocacy Lead, Christian Aid

Video of the event is available on the World Bank’s website.

Fran Witt: In this session, we will explore pathways to a fair energy transition through community-led solutions and cross-sector success stories. Place people and planet at the centre of progress. Pose a couple of framing questions to the panel: How can we ensure that CSOs and impacted communities are engaged and meaningfully consulted in all stages of decision-making? What type of financing will the Bank provide to support M300? What is the role of DPFs, indirect finance such as technical assistance, and guarantees?

Jay Heimbach: I love to engage with CSOs  – spent three years with the ONE Campaign. Still 600 million people without access to affordable, reliable energy. M300 is a partnership with AfDB to provide 300 million people with electricity by 2030. Shows Bank partnerships at their best: partners such as AfDB, SEforALL, Rockefeller Foundation. We understand the depth of the challenge  – group in Washington telling others what to do – that’s why we developed national energy compacts (12 developed so far)  – plans to get electricity access to folks. Pillars for the compacts: 1) affordable generation by using transparent competitive tendering, incorporating RE; 2) regional integration for affordable supply; 3) affordable connections; 4) private sector, which is key; 5) utility performance (in case private sector goes away). Successful Summit in January in Dar Es Salaam. How can we ensure CSOs have a seat at the table? That’s what my unit does – we will deepen those efforts to make this a successful effort.

Karabo Mokgonyana: I convene the WattsUp Africa Campaign – both M300 and WattsUp Africa do the same thing – but WUA is about people and centred on community. Why we came up with this campaign was to focus on what energy access means for people on the continent – not just a climate lens, which is crucial because of climate change impacts felt on a daily basis. WattsUp Africa sees energy on a development front: centring livelihoods and sustainable development – we want Africans to own this narrative. Not just saying we need energy access, need the lights on – it is about the development model. We want to work together on M300 – we aren’t against the idea at all, it’s timely and important  – but if it is not done well, it runs the risk of failing the African continent. The outputs will be about how communities respond to it — as a result, a lot of the decisions of governments, WB, AfDB – have long-term and far-reaching consequences if not done well. We hope M300 will respond to the climate crisis — decisions about energy sources need to match the reality that climate change is happening. If M300 is done well, it speaks to jobs, peace and security, development, health – not just energy access. We hope it will be industrially transformative, with a focus on RE. Important to have robust, intersectional safeguards: we are seeing displacements, health impacts, local SMEs being killed. How do we not repeat the same things we have seen before? Can we avoid these issues happening in the first place?

Africa has a colonial history: we don’t want exploitative FDIs, we don’t want increased debt burdens, or the risk of having a private sector as an end rather than a means (currently, often, it’s an end, and private-sector modelling has been problematic in many ways).

Mariana Paoli: What would a good M300 look like? It needs to break from previous models of finance and avoid mistakes of the past. Two key messages: 1) It’s really essential that the quality of finance is not based on debt-inducing instruments. Many governments in Sub-Saharan Africa are spending more on debt than on development or climate action. If we want to ensure that Africa goes through the energy transition needed, we need to depart from this model. 2) M300 should depart from over-reliance on private-sector-first approaches: we can’t put profits before needs. We know how much private finance has been problematic — when it comes to models of energy (centralised, mini-grids, energy systems)  – the bankable projects that return investments are not delivering what is needed. We have an exciting opportunity to rethink what the model can be to work for communities.

Dean Bhekumuzi Bhebhe: Three structural deficiencies in Africa that constrain development potential: 1) lack of food sovereignty, which is then further exacerbated by lack of clean cooking alternatives; 2) lack of energy sovereignty; 3) low value-added content export relative to import – we have become producers of what we don’t consume, and importers of what we do. These, in turn, have contributed to structural deficits, weakened currencies, and debt in foreign currencies – faced with rising import prices, this has led to stagnant development. Africa has 62 GW of RE installed across the continent – but the true potential is 8,285 GW. Less than 1 per cent of what is possible. Solar energy: deserts and year-long sunshine, so much potential — same with wind. Reflect this massive opportunity for clean energy – but also need political will to invest in it. M300 could unlock current development needs grounded in long-term sustainability. A key problem is gas as a transition fuel – looking at the 33 planned gas pipelines in planning or development – they are leaving the continent – this does not provide development pathways.

Also debt: Nigeria has already devalued its currency to keep up with trade wars. Six per cent of GDP is accounted for by fossil fuels, but 67 per cent of its GDP goes to debt – leaving under 35 per cent to inject into blocks of development. These financing models should be created to empower Africa – long-term costs of RE systems. Two to four years for gas to come online, whereas solar energy takes one year to come online into households.

Need robust principles to guide the shift to energy systems that create ownership and social equity – the African continent can break free from an exploitative model – but this needs democratic planning and social ownership. Ensures benefits of the RE revolution while tackling the climate crisis. We need Pan-African green industrialisation and economic sovereignty that breaks free from colonial patterns. A core element of this is the development of African markets to achieve economies of scale and robust industrial competitiveness.

Jay Heimbach: I want to connect some dots. Our big theme is around jobs at the Bank  – I want to connect with local communities. When Ajay talks about jobs, he will say it’s not about a pay check, it’s about a sense of dignity. Three pillars to jobs: 1) infrastructure needed for job creation (energy, healthcare, and skilling – where IBRD and IDA come in); 2) regulatory certainty that the private sector needs (creates 80 per cent of the jobs); 3) private sector, where IFC and MIGA come in (infrastructure/energy; agribusiness; healthcare; tourism; locally based manufacturing). Political will: we see it in national energy compacts. Billions to trillions did not materialise – there is not enough money to cover all development needs, so we need the private sector.

Dean Bhekumuzi Bhebhe: What does working with CSOs look like for you? Civil society has working experience with people you are trying to help.

Jay Heimbach: It’s a partnership that is robust and constant. CSOs are the eyes and ears: we are working on robust engagement with CSOs. It’s about granular working together.

Karabo Mokgonyana: We are not against the private sector. We just don’t want profits over access – when the private sector is running the entire system, then it’s not about development. PS is a means to an end.

Jay Heimbach: Point well made. Focusing on the outcomes – we are shifting the Bank’s perspectives from inputs to outputs — impact. We did not follow up on what this money led to, and why.

Questions and Answers:

Representative from TTA, Barcelona: There is a diversity in regulations, etc., in countries in Africa whereby strong regulations and cost-recovery in tariffs will be important to attract private investors. Yet, based on studies we have done for ESMAP in Niger, we have found attracting these private actors to deploy service areas for energy access – we think it should not only be mini-grids, but service areas – we found that not all countries have private operators who have the knowledge to do that work. What role do capacity building and experience building play in M300 to ensure African knowledge can be part of the solution?

Representative from WaterAid: We work on water. To hear that country compacts are working on governance, country pricing, etc., to bring in investments – how are you considering the cross-sectoral connections between energy access and other areas? Are there synergies you are seeing in M300?

Jay Heimbach: On capacity building, the Bank works on this across all sectors. On cross-sectoral, we are working with other GPs as well, particularly on water.

Representative from Center for Progressive Reforms in Uzbekistan: Relevant to Central and South Asia as well, the share of alternative energy was about 3 per cent in Uzbekistan. By 2030 we hope to achieve 40 per cent. This year we have achieved an energy surplus because of alternative energies. Challenges though: price is being increased for electricity to attract investors. On one hand, green energy is being built in deserts and areas with a lot of biodiversity – seems to be green, but how it is achieved is an important question. Uzbekistan plans to export it to EU countries through transmission lines. Are there such projects in Africa?

Representative from CAN Africa: How can Mission 300 be used as an opportunity to integrate green industrialisation within our continent?

Dean Bhekumuzi Bhebhe: On transmission lines, this speaks to how we can move up supply chains. It’s still more expensive to send out raw materials and then receive solar panels, etc. – we need to think about tech transfers for Africa to become a producer of final goods, which would be cheaper for us. We need tech transfer, but before that, even skills transfer to maintain long-term these capacities before the tech transfer.

Jay Heimbach: Skilling is a key pillar of the jobs agenda. Also, Pan-African energy systems – M300 will focus on the potential of regional integration. On industrialisation, we look at M300 as a robust set of policies – but also part of the jobs agenda, as local-based manufacturing – it all locks together.

Representative of SYND in Ghana: How can M300 prioritise inclusive and transparent processes to meet the needs of communities? At what point are we bringing young people to the table?

Mariana Paoli: The price of energy is based on the model. For example, Lake Turkana Wind Power: PPP model where we have the Kenyan state paying for electricity that is not being used and at a price that is three times higher than market value. The big question is: what is a good model that can avoid these consequences?

Jay Heimbach: Transparency: we are building out a tracker to track where projects are and where they are working. We need more consultations with CSOs – we need to build out the consultation process, and more youth in general.

Karabo Mokgonyana: M300 will only work if CSOs are involved in the entire process, so there is a sense of ownership for M300 because it belongs to the people.

Representative of a coalition of NGOs for monitoring reforms and public action in DRC: In terms of constraints – we had SEforALL and other initiatives in countries – most of those initiatives did not give the main results we needed. What needs to be put in place to be better than past initiatives?

Representative working with CSO in Pakistan: How can you benefit marginalised communities with M300?

Dean Bhekumuzi Bhebhe: One of the good things about M300 was CSO dialogue, but we need to refine it and make it stronger. We need communities to understand the initiative – when it comes to compacts, how were countries selected? What did the Bank look for to agree on these compacts? We need more transparency on processes. Then, the debt question – so much debt – it goes beyond de-risking private investments – how do we fit in, given the unjust international financial architecture?

Jay Heimbach: Updated corporate scorecard – holding ourselves accountable and using disaggregated data. On marginalised people, that is why compacts are designed for the countries they are addressing. Criteria for the compacts: countries willing to carry out reforms in those five areas/pillars – actionable and time-bound.

Representative from WaterAid: Grant-based and concessional public finance has a vital role to play – how can WBG deploy limited funds to support a just transition for energy access in Africa?

Mariana Paoli: M300 needs to put in place a different model of finance to enable a just transition – we need to do things differently and come with a different model. “Billions to trillions” did not work – recognising limitations of the private sector. If we get finance right, it has great potential without worsening the debt crisis and constrained fiscal space.

Jay Heimbach: IDA will be a big part of this. One-third of this financing comes from MDBs, one-third from countries, one-third from the private sector.

Karabo Mokgonyana: We are doing all of this for people: women, youth, communities. It’s important to centre all these discussions on how M300 serves them.

Dean Bhekumuzi Bhebhe: We have an opportunity to do something great for the African continent. How can we use M300 to prove we can move away from consultant-led processes to processes led in context? I am looking forward to this – also how we can work together a lot more as CSOs in Africa.