Can all of Africa get access to electricity?

This is an audio transcript of the FT News Briefing podcast episode: Can all of Africa get access to electricity?

Marc Filippino
Good morning from the Financial Times. Today is Thursday, June 23rd, and this is your FT News Briefing.

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Marc Filippino
US markets were pretty much flat yesterday even after the head of the Federal Reserve said a recession was possible. Moscow says a drone hit an oil refinery in Russia. Military experts say it’s likely the latest in a series of Ukrainian attacks. And nearly half of Africa doesn’t have access to electricity. We’ll take a look at how much it would cost for the continent to get there. I’m Marc Filippino, and here’s the news you need to start your day.

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Marc Filippino
Fed chair Jay Powell told Congress the economy could stand even tighter monetary policy. Higher interest rates, that is. But he also said there could still be a recession. Powell says avoiding the economic downturn depends on factors outside the Fed’s control. Those include the war in Ukraine and the Covid lockdowns in China. Markets seemed to greet Powell’s words with a resounding “meh”. The S&P 500 lost a little more than a 10th of a per cent on the day. It’s down more than 20 per cent since its peak in January.

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Marc Filippino
A fire broke out at an oil refinery in Russia on Wednesday because of a drone attack. That’s according to state media. It’s one of several attacks that military experts say are likely linked to Ukraine. The FT’s John Paul Rathbone is here to discuss them and give an update on how the fighting in eastern Ukraine is going. JP, what are these attacks targeting and how significant are they?

John Paul Rathbone
So Wednesday’s attack was by a kamikaze drone and there are a couple of things that are important about it. First of all, it appears as though it was a Ukrainian drone and because there’s a lot of western allies were concerned about the use of western weapons would be launching attacks into Russia. So that’s not the case here. And the second point is there have been other attacks inside Ukraine, behind enemy lines, which are arguably just as significant, anything to slow down the Russian advance, make their life difficult, complicate their logistics. There was one on the 1st of April when there was a massive explosion in Belgorod of a Russian oil refinery there, apparently from Ukrainian helicopters. Although in this case and in the Wednesday attack, neither side has really commented on whether it was a Ukrainian attack or not. So that’s a curious feature of these attacks.

Marc Filippino
So we’ve talked about this a little bit on the show, how Ukraine’s president, Volodymyr Zelenskyy has made a big push for more weapons and longer-range weapons. Has Ukraine gotten them and are they making any difference?

John Paul Rathbone
Well, they’re slowly filtering in, especially the heavy artillery for the land. Germany sent in some very powerful tanks. And the US and the UK are sending multiple launch rocket systems. What’s important about the multiple launch rocket systems and the US Himars is that they have long ranges that go far beyond the average 20km or so that artillery can reach. What’s interesting in these two attacks that we’ve just been talking about here is that it was Ukrainian weapons that were involved. And as western weapons start to arrive en masse and as Ukrainians are trained how to use them and maintain them, which is a key component, that could start to help to tilt the balance in Ukraine’s favour.

Marc Filippino
Got it. So the odds are not in Ukraine’s favour right now. Most of the fighting is going on in the eastern part of the country. Can you give us an update on how that’s going?

John Paul Rathbone
The Ukrainians say that the artillery that the Russians have is perhaps ten times what they have. The odds they’re facing are horrible and the bravery that they’re showing is extreme. And the town of Severodonetsk is all but encircled. And it’s a kind of repeat of the gory scenes and destruction that we saw in Mariupol, where the city is effectively razed and there’s a holdout of some Ukrainian forces in a factory. That’s the kind of general picture in the Donbas. Grinding war of attrition, very ugly for both sides. Huge rates of casualties on both sides. And in these kinds of battles, it’s really a test of endurance and morale and the ability to supply the army, whichever side you’re on, with the manpower and the artillery that they need to keep going.

Marc Filippino
That’s the FT’s John Paul Rathbone. He’s our defence and security correspondent.

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Marc Filippino
Twenty-five billion dollars a year: that’s how much it would take for Africa to have universal access to electricity by the end of the decade. So says a report from the International Energy Agency that was released this week. The IEA’s executive director, Fatih Birol, says energy access is the biggest barrier to the continent’s economic development. The FT’s Tom Wilson has been looking into this, and he joins me now. Hi, Tom.

Tom Wilson
Hi.

Marc Filippino
So what does access to electricity in Africa look like right now?

Tom Wilson
So according to the IEA stats, about 43 per cent of the population still lack access to electricity, which is a massive proportion, and that’s far greater than, than the deficit in any other part of the world. This is one of the most interesting things that jumped out when I took a look at the IEA’s Energy Africa energy outlook earlier this week. And that’s the point that access to electricity in Africa actually fallen by 4 per cent between 2019 and 2021. And that’s a big surprise in general, despite the fact that Africa continues to wrestle with access to energy. It was on a gradual upward curve. And the fact that it has actually regressed over the, over those three years is really quite shocking.

Marc Filippino
Now what did the IEA’s executive director Fatih Birol say are the biggest barriers to increasing electricity access?

Tom Wilson
His focus and the focus of the report was really on financing. Of all of the flows for climate finance, and that includes energy finance flowing from advanced economies to developing nations, only about 7 per cent of that goes to Africa. And with the IEA’s objective in putting this piece of work out is to try and raise awareness of that funding deficit and encourage, particularly multilateral development banks will be needed to anchor many of these investments to really focus on boosting the flow of capital into the continent. And there were some opportunities this year, not least the fact that the next global climate summit, COP27, will be held in Egypt in November. As such, it’s really being seen as an African COP as an opportunity for African countries to make a big push on clean energy investment and to really encourage good global flows of finance to head towards the continent.

Marc Filippino
What does the report say about how much of the energy can be achieved through Africa’s renewables?

Tom Wilson
The IEA report is, is not hugely detailed, but where it talks about the different splits, it outlines 80 per cent of the new generating capacity required by 2030 to come from renewables, particularly from solar, wind, hydroelectric and geothermal. I mean, solar is a vast potential in Africa. However, the second thing that really stood out from this report and from my conversation with, with Fatih Birol is that he also argued in favour of an increase in Africa’s production of natural gas because certain parts of heavy industry simply need at the moment natural gas in order to operate, things like the production of fertiliser, the production of steel and cement. And why this is particularly interesting is that to some extent it goes against something which the IEA said last year. So last year they put out a flagship report where they outlined what the world would need to do in order to reach net zero emissions by 2050. They said that no new fossil fuel developments were required. What they’re saying here is actually slightly different. They’re saying it’s only fair to allow Africa to develop more of its own hydrocarbon resources in order to industrialise.

Marc Filippino
Tom Wilson is the FT’s senior energy correspondent. Thanks, Tom.

Tom Wilson
Thanks very much.

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Marc Filippino
You can read more on all of these stories at FT.com. This has been your daily FT News Briefing. Make sure you check back tomorrow for the latest business news.

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