December 11. 2023. 11:14

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€4 bn extra for Africa: Germany’s Scholz doubles EU green energy fund

Germany is providing fresh money to Africa as part of advancing the continent’s green energy transition, building on a more consistent engagement strategy of Chancellor Olaf Scholz’s coalition government.

Going into COP28, the annual world climate summit to be held in Dubai from 30 November, Berlin has been ramping up its engagement efforts with the African continent. On offer are large sums of public money to boost African countries’ green transition.

“We are advancing this just energy transition together with the EU and African partner countries,” Chancellor Scholz explained on Monday (20 November) to kick off the meeting of the G20’s compact with Africa, that Germany had initiated in 2017.

“The Africa-EU Green Energy Initiative is central to this, and I am delighted to announce here today that we will make €4 billion available until 2030,” he added. The money should be spent on “advice, investment” and facilitating private investment.

This comes on top of the €3.4 billion in EU grants allocated to the initiative when it launched, effectively more than doubling the available funding.

Those EU grants, like much of the Global Gateway initiative launched by Brussels in 2021 to counter China’s growing influence in Africa and elsewhere, repackaged the existing money.

Germany’s announced €4 billion represents fresh money. “This is not about development aid based on the outdated pattern of donor conferences, this is about investments that pay off for both sides,” said Scholz.

“Do not leave Africa to the Chinese,” urged VDMA, an association of Germany’s mechanical and plant engineering companies. Given China’s lead in supplying machines to Africa, Germany needed to provide a more attractive investment environment by offering cheap loans and export guarantees, the association added.

The AEGEI’s stated aim is to support the deployment of 50 GW worth of renewables and provide 100 million people with access to electricity. But there is also an infrastructure component to the fund. Planned projects include connecting the grids of Zambia and Tanzania, as well as Angola and Namibia.

For Berlin, providing extra funding is not motivated by altruism alone. Given Africa’s large potential for renewables, Germany is betting on close cooperation between businesses in areas like hydrogen.

“I am convinced that there are great opportunities here for expanding cooperation between German and African companies,” stressed Scholz. In some African countries, like Nigeria and Angola, Berlin has already established “hydrogen embassies”.

The current German government has been rather active when it comes to demonstrating its commitment to Africa by travelling there. Scholz has made three longer trips.

In October, both the Chancellor and the German president, as well as the development minister, visited various African countries together.

“I do believe that the German government is taking Africa seriously,” Rainer Thiele, a professor for international development in Kiel, told tagesschau.

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