00:00This week Africa's climate challenges. How does the continent most exposed to climate change plan to tackle the green transition. So love has to be on default go to technology to resolve the energy crisis. Resource rich Africa has a choice to make between natural wealth and environmental destruction. We'll take a look at Guinea's commodities. Catch 22. I have reasonable doubts of this company and its operation here because of his environment performance and the funding gap. How does the constant plan to pay for clean technologies should more developed nations be playing their part. What I've been focusing on is is trying to make sure it promises that we made also deliver from Bloomberg's global headquarters in New York. I'm Kelly Lines and this is Bloomberg Green. Africa has contributed negligible to climate change with just about 2 to 3 percent of global emissions but it stands out disproportionately as the most vulnerable region in the world. Part of this is due to the continent's geography but it is also driven by a lack of financial buffers to mitigate the worst impacts of global warming. In this edition of Bloomberg Green we assess why Africa is so at risk from climate change and investigate the projects what you can hold up as beacons of green development. Africa is known as a continent abundant in natural resources. So we'll look into how a mountain range in Guinea could be both a source of wealth and a potential ecological disaster. And funding the change. Rich nations that spent history plundering Africa are realizing they have a duty to help the continent adapt. But some nations are also coming up with their own solutions to fixing the green finance gap. First let's get a sense of the scale of the problem. Over 60 percent of Africa's GDP is in some way dependent on nature logging only behind Indonesia and India according to estimates from the World Economic Forum. This means that climate destruction could lead to enormous financial loss for the world's poorest continent. Arlene Bagwell explains. Africa faces a myriad of challenges relating to climate change including food insecurity climate migration and the destruction of biodiversity to name a few. Despite only contributing 4 per cent of the world's carbon emissions this year the heaviest rains in at least six decades has killed four hundred and fifty nine people around the South African city of Darwin and in the Horn of Africa. It's suffering its worst droughts in 40 years. This is leading to a humanitarian and environmental crisis particularly in Kenya where bloated livestock caucuses and sun bleached bones lessen the parched landscape. The extreme weather conditions has now made about 60 percent of the continent's population food insecure and biodiversity is rapidly declining. Between 1970 and 2016 the population of mammals fish amphibians and reptiles fell by 65 percent according to WWF. Another climate related challenge for the continent of Africa is migration. By 2050 86 million people from Africa will have been forced to move because of climate change according to the World Bank. But just this year alone a record number of migrants from the continent will arrive at the U.S. Mexico border with many of them citing droughts and floods as part of their reasoning to fly a walk thousands of miles away from home in a bid to solve some of Africa's climate problems. At Covid 26 richer nations pledged to double the funding they give to poorer nations to cope with climate change. This is without giving a specific figure. But this year's COP 27 will be in Egypt and is expected to focus on Africa's needs despite Africa's many climate challenges. The continent is bursting with ingenuity and enthusiasm for climate solutions. Renewable power is one of the top priorities for Africa's rapidly expanding population. Pushing economies to the next stage of the green transition Ryan has kept took a look at some of the biggest projects pushing forward with Africa's generation of climate smart renewable energy. Despite Africa's many climate challenges the continent also abounds with the ingenuity and enthusiasm necessary for climate solutions. Renewable power is one of the top priorities for this rapidly expanding population taking its economies to the next stage of the green transition. Let's take a look at some of the biggest projects pushing forward with Africa's next generation of green energy. Africa is well known for being hot but one country is getting its energy from the fires below the earth rather than the sun above. Kenya is tapping geothermal energy below its Rift Valley region to the tune of around 40 percent of its annual energy demand. This makes Kenya the biggest user of renewable geothermal power anywhere in the world as a proportion of its energy mix. Kenya's or Correa V1 power station in Hells Gate National Park is currently under construction and due to be completed in 2024. When it's up and running it's set to be the largest geothermal power plant anywhere in the world. Finally we can talk about Africa's renewable power revolution without talking about solar. The new solar power station in central Morocco is the world's largest concentrated solar power plant. Nothing else even comes close. Add to that the fact that it's situated in a region with some of the highest amounts of sunlight in the world. And you've got a lot of potential power. Renewable energy efforts in Africa are key to solving the global climate crisis. That includes the use of products like biofuel and the utilisation of solar energy widely and cheaply. Bloomberg spoke to two executives who are transforming lives in part of the continent using alternative green solutions and reducing the continent's emissions. Part of a Bloomberg Invest Focus on Africa panel. They spoke about how the continent can benefit from the dynamics of a global energy transition. We basically get agricultural waste now. No one needs. And that's usually but so rice husk maize cops redundant shells coffee husks. We convert that into methane and hydrogen which then goes into an engine and runs it and that generates electricity. Peter Van der NIKKEI co-founder of Energy Solutions for Amanda Lang US also deploys many energy grids in Africa. But challenges include finding storage solutions managing energy grids and dealing with excess supply. To have a portfolio of mini grids and by working on the data show technologies that connect them all together you're able to work with you know tens of thousands of sources of biomass feedstock to feed those many many grids in terms of waste to energy but also manage the distribution of electricity to the households in a particular mean mini grid. Most of the electricity is used for agriculture value addition because the big the big corpus out there you know in terms of breweries in terms of you know other food industries global ones have their supply chains in these villages and they need those products you know properly processed to the right quality standards dry cleaner etcetera. And so the electricity that we generate and that we deliver at that low cost enables industry to set up branches in these rural rural areas enabling these communities to actually feed into the global marketplace. And that allows us to run you know around the clock. Another cheap resource for Africa is solar as one of the cleanest and most abundant sources of energy on earth especially when compared to the energy grid. Norman Moyo group CEO of Distributed Power Africa says part of the solution lies in partnering with the big guys as you know to date. Solar is probably the cheapest source of energy much cheaper than decreed. If I was to throw in numbers solar per kilowatt hour couldn't reach anything that on seven cents right now. If you are building a decent enough plant size your typical grid enough look at the correct pricing should be in the 15 to 15 years since correct price. I say so because there's a lot of subsidy right. He's also created problems. Your typical generalities anyway in the 24 U.S. cents per kilowatt hour. Much more expensive. Or solar has to be on default and go to technology to resolve the energy crisis in Africa. We were very deliberate and sees these the top 500 corporates in Africa. That's our sweet spot. If I mention the name you know them whether it's Unilever Coca-Cola whether it's private schools with as clearly the big guys the big guys. The second piece is the data centers in the telecom switching centers. Then you've got telecom towers in Africa. Those are probably the key customers will can it 10 to 20 year commitment that they will buy powerful my sister pilot lease agreement where popular sentiment in their investment grade. And those are the ones that we are starting with. I think eventually it will converge with what he's working on and what the grid is trying to do. And eventually we would have solved this crisis in Africa. Coming up one mountain range in Guinea has enough iron ore to build 100000 Empire State Building. But what about. Better for the environment to leave those resources underground. This is Bloomberg Real Yield. Guinea steam on do mountains hold the largest untapped iron ore deposit on the planet. An estimated eight point six billion metric tons of or are buried there enough to forge the steel for one hundred thousand Empire State Buildings. But Guinea faces a tough choice capitalize on its natural resources at the cost of the environment or leave trillions of dollars underground. Regardless a group of China connected companies is moving ahead with a plan that jeopardizes one of the most biologically rich ecosystems in Africa. Our Christine Lee Edwards has the story. This is my fifth trip to Guinea and coming here to monitor Chinese mining corporations rather than to the human rights performance dinging Jiang is the Washington based lawyer I traveled with. Who's working with other NGO is in the area. She's been called the Erin Brockovich of China for winning the first large class action environmental lawsuit in that country. I have reasonable doubts of this company and its operation here because of his environment performance. The bauxite and mining reaching. The consortium that will mind you Monday is already mining bauxite used to make aluminum in Guinea's bouquet region. I know the red. This company is wrecking this bucket. Okay. It's about a six hour drive north of Kenya's capital Conakry. Being there the first thing you notice of the dust. It's everywhere in your hair and your eyes and all over the crops. People are trying to grow. Water sources have been polluted fishing stocks have declined and jobs promised to the community have yet to materialize. In any large number N and Ivy League you'll be able to focus on fully a lake community. The exit look for debris left this year was part of lake community forced to level two minutes on city. The Melody's recipe for let communities back into Monday. Chinese workers have set up a gated camp near the village of tomorrow. The pics here contain as much as 65 percent iron which according to experts is the highest grade possible in nature. This is a here from project to one of the biggest in Africa. Environmentalists are concerned that what happened in BC will happen again and seem due to the Western backed would be. Descriptions of the farm surrounded the mountain down many villages living from from from their lands. If there is a land fall these people will be in poverty. Guinea is also the largest remaining habitat of the critically endangered West African chimpanzee. What makes this Amanda Lang different from book is the forests and the West African chimpanzees. The first have the Covid sink effort was your cards the trees. No CO2 would be released to the atmosphere and therefore cause the climate impact. We know how many chimpanzees are important for the forest to head the forest to grow again. Despite all the concerns stopping on mining operation seems to be off the table and probably impossible. The government is expecting 15 billion dollars in tax revenue over the next 25 years. We don't want to stop the project. We want companies to be more responsible. So does the benefit me. This shared company would have its benefits. The government would have its benefits and the communities have their benefits. Here in Guinea the institutions are weak. The governance is weak. The enforcement of laws are weak. Holding multinational accountable is always legally difficult because their operation cross countries borders. Their capital structures are designed to avoid legal liability even with a lack of liability and weak enforcement. The local community has demands and those leaders may enact actions that could lead to conflict. It is up to me on the spot on the funding. Also look I see I may fail to see you see it but let's let us underscore to the body look to get additional initiative on. Chinese workers are cutting mining roads and blasting tunnels for a 400 mile railway line to bring the iron ore from surmounted to a new port where it can be loaded onto ships bound for the other side of the world. We were only briefly able to take a photograph before being chased away by Chinese workers. I want to bring attention about now under this new type of multinational where they are from China and many of them are state owned. Politically they're protected by the country. We have been seeing all sorts of the policies issued by Chinese governments to make about the roads initiative getting sustainable. We need enforcement of those good policies. And so far we haven't seen much yet. That was Christine Lee Edwards there. Coming up how does the UK intend to honor its commitments to help Africa transition to clean energy. Our conversation with Vicki foreign minister for Africa Latin America and the Caribbean. This is Bloomberg Quicktake. From Bloomberg's global headquarters in New York I'm Kailey Leinz and this is Bloomberg Green. The transition to clean energy is expensive and it's important for the planet that developing countries are assisted along that transition by countries that can afford to help. It's why at COP 26 pledges and promises were made to do just that. Vicky Ford UK MP and Minister for Africa Latin America and the Caribbean spoke to Bloomberg about those promises and the UK's role in ensuring other countries keep their word. The UK as president of COP feels a really important role and I've discussed this with Alix Steel a really important role to encourage those countries who all made these really important promises to actually deliver on them. But yes you are right. This is this huge issues that we have when you see the really adverse impacts. So for example I've been in Malawi where I've met young girls whose schools been washed away by the flood. I've met just tragedy of the drought in Somalia. So one of the things that we as the UK are doing is through our international development strategy. We are increasing backup the amount of money that we spend on humanitarian aid. And that's meant that we've been able to put for example new funding into help the situation in Somalia since COP 26. Europe has increased its use of fossil fuels specifically since the war in Ukraine broke out. So how can it intend to convince Africa not to do the same thing. Vicki Ford told us her thoughts. You know we've seen this awful illegal invasion of Ukraine. It has had this massive impact on fuel prices across the world. It's really hitting the world's poorest. But it's also reminded us of the need for energy security in the UK. That's actually reminded us that actually we need to work towards having more renewables more new nuclear power as quickly as possible. And I think the same goes for countries all across the world. Obviously to get to that energy transition you sometimes use gas as a transition fuel. But actually we should be accelerating our focus on getting those cleaner greener energy sources out there as well. We've just seen in the film that we just watched you know that devastating environmental impact in Nigeria of fuel theft legal fossil fuel extraction. It's one of the reasons why when I meet the Nigerians I've not only spoken to them recently but how do you how can they tackle that better but actually also how can they move on with some other plans to increase for example solar contrast to diversify. And that I think is really really important. We should be working to diversify those energy sources. Our conversation there with the UK UK's Vicki Ford. But Africa is also coming up with its own innovative ways to fund its green plants especially when it comes to wildlife. Over 60 percent of Africa's gross domestic product is in some way dependent on nature but biodiversity on the continent is rapidly declining. Between 1970 and 2016 the continent's population of mammals fish amphibians and reptiles fell by 65 percent according to the WWF. In order to save some endangered species governments and the private sector in Africa are pioneering a new type of sustainability bond. Here to give us more details is Bloomberg senior reporter in South Africa Antony's cuisine. So Anthony talk us through what the African sustainable financing sector looks like as a whole. Largely it's it's pretty nascent. There's not much going on yet. There's a lot of interests of a lot of discussions. This bond you talk. So if the biodiversity bond that we've just mentioned there and there are initiatives around the continent to get green bonds up and running that are linked to forest protection biodiversity protection replicated on a much grander scale. OK well let's narrow the focus and focus on South Africa where you are. What is their wildlife conservation bond. Why is it so significant. OK. It's a world first. Basically there is a bond that the government played a part in. Well it's a private sector and that's supported by the World Bank primarily. And the idea is that it attracts private finance into a bond. And the returns on a bond are paid out if certain pre-set targets for the populations of black rhinos and to reserves increase over five years by a certain amount. Well let's talk about other financing deals then. Green financing deals or projects in particular. What are some of the other kinds that investors are looking at on the continent. Well it's a lot of talk about carbon credits basically preserving forests in central Africa with the Congo. Based on this that's a sick world's second biggest tropical forests off of the Amazon. And basically for doing that. Countries like Gabon are paid by other countries in Europe or even private emitters for instance a Polish coal company or a company operating a power plant somewhere in Europe or Asia. And they pay out those they pay a certain amount. And in return their own emissions are offset. And the Gabonese government or the government of another country will preserve a certain amount of forest which absorbs carbon dioxide and also acts as a carbon sink thereby mitigating against our emissions. Interesting. And finally at COP 26 we saw South Africa sign a landmark deal. What is the latest on that. Okay that deal is still in process but yes it is a landmark deal because again it's supposed to serve as a prototype for countries in Africa and elsewhere. So South Africa is a fairly industrialized country which is unusual for Africa almost entirely dependent on burning coal for power. So the European Union Germany France the U.S. and the U.K. have pledged eight point five billion dollars in aid or concessional loans to South Africa to help convert its coal fired power stations into renewable power plants to help offset some of the social costs. Because obviously a lot of people will lose their jobs and to transition the country country away from coal to green energy. But once that takes place it could serve as an example for other coal cum coal dependent countries like Indonesia Vietnam possibly even India to follow. They're also holding talks with donors and we could see it sit a quite important precedent. All right. Thanks so much to Bloomberg senior reporter in South Africa. Anthony cuisine. So despite the immense difficulties that Africa faces from climate change it's rising to the challenge with massive green infrastructure projects and innovative funding solutions. That's it for this edition of Bloomberg Green. But you can keep the conversation going by following us on YouTube Instagram and Twitter at climate from Bloomberg's global headquarters in New York. I'm Kailey Leinz and this is Bloomberg Green.

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Bloomberg Green: Overcoming Africa's Climate Challenges

The continent of Africa is the most exposed to climate change, despite contributing a minimal amount to global carbon emissions. In this edition of Bloomberg Green, we look at the impact of climate change on Africa's biodiversity, food security and economic growth and how governments are mitigating issues. We speak to Peter BenHur Nyeko, co-founder of Mandulius, Norman Moyo, CEO at Distributed Power Africa Group, and Vicky Ford, Minister for Africa at the Foreign, Commonwealth & Development Office. Then, we focus on the mining in Guinea and expose the environmental and human rights issues at the heart of the industry. Finally, we look at how the continent is innovating in finance to back new sustainability projects. (Source: Bloomberg)