Africa’s journey to net-zero: USD7 trillion just for energy

The green energy transition is a once-in-a-lifetime opportunity for African development, a chance to reduce poverty and lift growth potential. To reap this opportunity, there are three levers to pull: strengthening political stability and the rule of law, reducing project risks by adopting blended finance, and formulating clear green-energy strategies backed by economy-wide transition plans with sector-specific pathways. This paper aims at the last point, providing guidance for governments and investors alike. 

Limiting global warming to the Paris target of 1.5°C will require USD200bn of investments in the African energy system per year, by 2030, followed by USD370 billion per year, by 2050. In total, the investment opportunity adds up to just over USD7 trillion between 2020-2050. 

On that journey to net zero, two subsectors are pivotal. First, Africa’s electricity-production capacities will have to increase tenfold by 2050, requiring USD110 billion of investment per annum as early as 2030, which then would need to increase to USD190 billion in 2050 to meet the goal of limiting the global temperature increase to 1.5°C. Second, yearly investment needs in the African hydrogen market will have to reach USD 2-3 billion per year in 2030 and USD4-9 billion in 2050. African countries feature a promising combination of resources, coastal access and favorable location, positioning the continent as a potential central hub for the hydrogen-based global economy. Note that hydrogen investments in Nigeria are set to be significantly higher than in most other major African economies and will already reach USD2 billion in 2040. 

Related information

"Africa's journey to net-zero: USD7trn just for energy"
Please also check out the Sectoral Assessment of Multiple Emission Pathways, set up by Allianz Economic Research:
The Allianz Group is one of the world's leading insurers and asset managers with around 125 million* private and corporate customers in nearly 70 countries. Allianz customers benefit from a broad range of personal and corporate insurance services, ranging from property, life and health insurance to assistance services to credit insurance and global business insurance. Allianz is one of the world’s largest investors, managing around 746 billion euros** on behalf of its insurance customers. Furthermore, our asset managers PIMCO and Allianz Global Investors manage about 1.8 trillion euros** of third-party assets. Thanks to our systematic integration of ecological and social criteria in our business processes and investment decisions, we are among the leaders in the insurance industry in the Dow Jones Sustainability Index. In 2023, over 157,000 employees achieved total business volume of 161.7 billion euros and an operating profit of 14.7 billion euros for the group.
* Including non-consolidated entities with Allianz customers.
** As of March 31, 2024.
As with all content published on this site, these statements are subject to our cautionary note regarding forward-looking statements:
Allianz spearheads Sustainable Investments with Net-Zero Asset Owner Alliance's comprehensive new protocol

The Net-Zero Asset Owner Alliance (NZAOA) is leading the financial industry towards a sustainable future. It has recently released the fourth edition of its Target-Setting Protocol, a comprehensive guide that outlines the pathway for investors to reduce portfolio emissions significantly by 2030, aligning with the 1.5°C ambition set forth in the Paris Agreement.

Dow Jones Sustainability Index recognizes Allianz as a Sustainable Insurer and underpins transition efforts – “It’s an incentive to continue our work!”

Allianz received a score of 82 (out of 100) in the 2023 Standard & Poor (S&P) Global Corporate Sustainability Assessment (CSA), underlying the Dow Jones Sustainability Index (DJSI), as of 24 November 2023. The results reflect Allianz's long-standing commitment to driving positive social and environmental change as well as building meaningful partnerships to shape a better, more sustainable future.

COP 28: EIB and AllianzGI announce new capital commitments to the Emerging Market Climate Action Fund (EMCAF)

New capital commitments from the United Kingdom and German governments. / The fund invests in green transition funds and projects in emerging and developing markets worldwide. / Launched at COP26, EMCAF has already invested more than $100 million in five funds over two years. / EMCAF on track to hold its third close at €385 million in the coming weeks. (Article links to external site)