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Published On: Mon, Jun 30th, 2014

Unlocking Africa’s potential through renewable energy

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By Dr. Shamas-Ur-RehmanToor

Growing up in rural Bangladesh, Halima did not have electricity at home.  She struggled to study by the light of candles and kerosene lamps, often suffering from headaches caused by the fumes.  But, in 2005, when her father installed a solar home system and brought electric light to their house for the first time, Halima was able to focus more on her studies.  She is now a student at Dhaka College, working to become a teacher, achieving a dream that she did not think was possible.

The Islamic Development Bank has already seen the positive impact of these energy investments on individual lives across Africa and Asia. Bringing electricity to villages can have a dramatic impact on economies and incomes. In Ayni, Tajikistan, a young woman named Munisa was able to double her daily income from sewing dresses thanks to the reliable 24-hour electricity provided by a hydroelectric plant built nearby. In Bangladesh, Irfan was able to extend his hotel’s hoursand purchase a television for his hotel to attract customers.

While many regions lack electricity, Africa is the epicenter of energy poverty globally. Nearly 600 million people in Africa lack access to electricity.These people typically live in remote villages and use kerosene lanterns or rely on candles for lighting at night. Without electricity, darkness halts businesses and other income-generating activities. Students cannot study after dark, health clinics cannot provide services to their patients,and social gatherings are difficult to arrange. In other words, life comes to a standstill after dark.

Lack of electricity also keeps people from experiencing the benefits of modern life. It prevents people from using mobile phones, televisions, computers, the Internet, or electrical appliances. Lack of electricity not only cripples socio-economic development, it impedes personal development. Without electricity, people, especially in rural areas, find it even more difficult to climb out of poverty.

The benefits of bringing electricity to the poor can be seen across education, health, and economic development.From children being able to study longer and clinics being able to refrigerate vaccines to having electric pumps at water wells and other infrastructure, electricity changes lives and transforms village economies.

In recent years,development institutions, governments, NGOs, and entrepreneurshave focused on expanding access to electricity as a way to support economic development. Organizations like the OPEC Fund for International Development, USAID, and the African Development Bank have committed large sums toward the goals of increasing the number of people with access to electricity.

The Islamic Development Bank has been an important player in the energy sector. Based in Saudi Arabia, the Bank seeks to fund development projects across its 56 member countries, 26 of which are in Africa, and has long supported investments in energy poverty. Given the large number of people lacking access to electricity in its member countries—21 of the Bank’s member countries are classified as least developed countries by the United Nations—the IDB has been scaling up its commitment to bring sustainable, reliable, and affordable energy to the poor communities it serves.

In line with its continuing commitment to reduce energy poverty and work together with its development partners, the IDB and its poverty alleviation arm, the Islamic Solidarity Fund for Development(ISFD), recentlylaunched a new initiative to alleviate energy poverty. This initiative, called the Renewable Energy For Poverty Reduction, was launched in Dakar, Senegal, June 3, and will unlock US$ 180 million over the next three years to fight energy poverty. Proposals are already lined up to provide solar-diesel hybrid mini-grids to a number of communities in member countries.

The international community is also prioritizing the fight against energy poverty.The UN recently highlighted the potential of these partnerships at the Sustainable Energy for All Forum in New York.UN Secretary-General Ban Ki-Moon said, “Sustainable energy can revitalize our economies, strengthen social equity, and catalyze a clean energy revolution that benefits all humanity. Acting together, we can open new horizons today and help power a brighter tomorrow.”

These efforts are part of a broader effort to help communities lift themselves out of poverty. Investments in electricity access create direct and indirect jobs, and provide an economic engine to power growth. For example, Bangladesh’s solar home system program has helped spur tremendous activity in the private sector. There are now nearly 200 solar panel suppliers, 4 panel assemblers, numerous battery manufacturers, and a number of charge controller and light suppliers and manufacturers in the country.

Africa is rich in energy resources, including hydropower and solar energy, but still suffers from energy poverty. This is proof that the potential exists, but that smart investment can harness that potential and unleash the opportunities of the continent. It won’t be easy, but if we work together to forge partnerships and alliances, find viable solutions, and engage communities, we can rightfullyimagine an Africa rich in energy.

Dr. Shamas-Ur-RehmanToor, Ph.D, is a Senior Portfolio Management Specialist at the Islamic Development Bank’s Islamic Solidarity Fund for Development, which recently launched the Renewable Energy For Poverty Reduction Initiative.

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