Side Event: Accelerating the energy transition through integrated and inclusive regional renewable energy and energy efficiency product and service markets within the African Continental Free Trade Area (AfCFTA)

UNIDO 9th Ministerial Conference of the Least Developed Countries (LDCs)
VIRTUAL SIDE EVENT 6 - PANEL DISCUSSION 
"Accelerating the energy transition through integrated and inclusive regional renewable energy and energy efficiency product and service markets within the African Continental Free Trade Area (AfCFTA)"

25 November, 17:00 – 18:30 CEST
 The online registration is open 

Within the framework of UNIDO 9th Ministerial Conference of the Least Developed Countries (LDCs), UNIDO organizes a panel discussion titled “Accelerating the energy transition through integrated and inclusive  regional renewable energy and energy efficiency product and service markets within the African Continental Free Trade Area (AfCFTA)”. The event is organised under the umbrella of the Global Network of Regional Sustainable Energy Centers (GN-SEC) program  and the Energy Efficient Lighting and Appliances (EELA) project. It contributes to various priorities of the upcoming 5th United Nations Conference on the Least Developed Countries (LDC5) and the Doha Programme of Action to be adopted. Moreover, it facilitates the discussion on the operationalisation of the sustainable energy dimension of the Africa Continental Free Trade Area (AfCFTA).  

BACKGROUND AND CONTEXT

The Africa Continental Free Trade Area (AfCFTA) is the African continent’s most ambitious integration initiative, embedded in the Agenda 2063 of the African Union, whose main objective is to create a single continental market for products and services with free movement of people and investments, thus expanding intra-African trade across the continent, enhancing competitiveness and supporting economic transformation in Africa. 

The expansion and harmonization of regional renewable energy and energy efficiency product and service markets is an important pillar of the AfCFTA and can become an accelerator of the continent’s energy and climate transition. This vision goes beyond the interconnection of transmission lines and pipelines and includes the entire value chain of sustainable energy product manufacturing and servicing. Most of the African countries have set ambitious goals for grid-connected and decentralised renewable energy and there is a growing demand for a broad range of on-grid and off-grid solutions, including digital devices. Moreover, major market shifts to more efficient lighting and appliances meeting harmonised standards are underway. 

These trends offer opportunities for domestic energy entrepreneurs and businesses to get a “fair” share of the investments, in terms of revenue and job creation. However, since the productive capacities are unequally shared among Africa, there is need to further mitigate barriers related to inter-regional trade and quality standards. An inclusive energy transition requires special attention to local value creation, as well as supply(ier)-oriented incentives, standards, quality infrastructure and business models. However, particularly least developed countries (LDCs) are often reduced to the role of importers. This questions the long-term sustainability of investments in decentralized renewable energy mini-grids and stand-alone systems, as well as energy efficiency in general. The lack of domestic R&D, entrepreneurship and innovation hinders the commercialization solutions adapted to the realities of LDCs and small island developing states (SIDS) in Africa. 

Therefore, over the past decade, UNIDO in close partnership with the regional economic communities (RECs) has established the Global Network of Regional Sustainable Energy Centers (GN-SEC). Under a joint platform, UNIDO provides support for the creation of such centers and facilitates south-south and triangular cooperation on energy solutions of mutual interest. Together with the recently adopted Central African Centre for Renewable Energy and Energy Efficiency (CEREEAC), the network covers the entire African continent and complements the important work of the regional power pools and regulators. 

As part of the economic integration efforts of the RECs, the GN-SEC centres aim to accelerate the energy transition by creating economies of scales, equal progress and spill-over effects between countries. The integration and harmonization of sustainable energy product and service markets is an important cornerstone of their work. Actions to strengthen the local productive and innovation capacities of energy businesses and entrepreneurs is a particular focus. This is done by setting fiscal and non-fiscal incentives, local content requirements, product and service standards, support for R&D, qualification and certification and quality infrastructure.  

In this context, an interesting example for south-south cooperation is the area of energy efficiency. Through the regional centres, ECOWAS, SADC, EAC and Arab countries have developed regional minimum energy performance standards (MEPS) for electric appliances, which are currently nationally implemented. They will become drivers for market transformation, protect the consumers from an influx of low quality and inefficient products, make locally produced or assembled products more cost competitive and have further positive impacts for more than 800 million African energy consumers. Another innovative example is a regional approach, which aims to create clean tech cluster hubs providing shared resources, intelligence, incubation support and makerspace to entrepreneurs and start-ups in lower-income countries.

• Broaden the discussion on the energy dimension of the AfCFTA beyond the interconnection of power pools by considering the entire value chain of sustainable energy product manufacturing and servicing. 
• Strengthen the awareness on the benefits of the AfCFTA for an inclusive African energy and climate transition, creating local jobs and turn-over, facilitating inter-regional trade and joint ventures between African businesses.  
• Strengthen the awareness on the importance of supply(ier)-side support, local content requirements, quality infrastructure and standards for the African sustainable energy industry. 
• Reinforce the role of the GN-SEC centres regarding the harmonisation of sustainable energy product and service standards and the implementation of the energy dimension of the AfCFTA.  
• Facilitate the development of an UNIDO GN-SEC program in support of the AfCFTA, focusing on sustainable energy quality infrastructure and standards, including for on-grid and off-grid renewable energy solutions, as well as efficient appliances.