Allianz Contacts
Search
Allianz Contacts

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

Allianz SE | Munich | Nov 16, 2022

Africa is at the epicenter of the climate crisis. Although the continent contributed the least to global warming, it is burdened with the highest impacts and losses. The green energy transition is a once-in-a-lifetime opportunity for African development, a chance to reduce poverty and lift growth potential. Allianz Economic Research has published a report on net zero transition for Africa,  the role of private investments for a clean African future, energy as catalyst for any development and electricity and hydrogen as green sources of the power needed.

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. 

#AllianzOnClimate
Join the conversation
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"
Read the full report
Please also check out the Sectoral Assessment of Multiple Emission Pathways, set up by Allianz Economic Research:
SAMEPATH

About Allianz

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 737 billion euros** on behalf of its insurance customers. Furthermore, our asset managers PIMCO and Allianz Global Investors manage about 1.7 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 December 31, 2023.

Cautionary note regarding forward-looking statements

As with all content published on this site, these statements are subject to our cautionary note regarding forward-looking statements:

Related stories

Nov 30, 2023

Net-Zero transition plan – leading the way and driving the change

In September 2023, Allianz published its first net-zero transition plan, which lays out the details for its 2030 intermediate targets to decarbonize own operations, proprietary investment, and P&C underwriting. With this, Allianz is leading the way in the financial services industry. Because climate change is one of the biggest risks that we face globally, we remain committed.

Nov 13, 2023

COP 28 preview: taking the temperature

This year’s UN Climate Change Conference – COP 28 – starts in late November in Dubai. A busy agenda includes a focus on the impact of heatwaves on health and how trade can play a role in mitigating climate change.

Nov 08, 2023

Daring to Do More Blended Finance: Book chapter by Oliver Bäte

How can we accelerate an intelligent, sustainable transformation while also strengthening Germany and Europe as a global, competitive, and efficient location for industry and technology?

174 releases in total