Microloans for the energy transition in Africa

The Frankfurt School of Finance, the EU and the UN support renewable energies in Africa

Udo Steffens, a German economist and the president of the Frankfurt School of Finance & Management (FS), is an expert on all matters relating to business in Africa. While undertaking church development work in Togo, the economist rebuilt a company that sells, publishes and prints books. In Cameroon, he advised the Evangelic Centre for Development Aid (EZE). These days, Steffens uses his experience of working abroad to engage in FS activities in many African states. The School of Finance is also involved in a project in Congo, where the economics experts set up a centre for microfinance that was funded by the German Academic Exchange Service (DAAD) to the tune of 1.6 million euros. The centre aims to give African students the chance to take a Master’s degree and learn how to manage microloans efficiently. “More than three billion people around the world are excluded from the financial sector because conventional banks do not offer services to clients with little in the way of cash,” explains Professor Udo Steffens. Previously, it was primarily aid organizations that offered microloans to smallholders or artisans in developing countries, thus enabling them to set up their own small businesses. Experts believe, however, that the energy transition in Africa could also be financed by microloans. According to Ibrahim Togola, director of a West African environmental NGO, 80% of households in sub-Saharan Africa still use biomass for cooking and heating. Putting an end to the use of firewood would save lives, as around 400,000 Africans each year die of smoke inhalation alone. Many diseases caused by dirty water would be avoided if electric pumps were used to pump clean groundwater – for example, using solar power. Such renewable energies and their funding represent a growth market, which is why the FS offers a degree course in Frankfurt entitled Renewable Energy Finance. On an international level, the Frankfurt School of Finance, in cooperation with the United Nations Environment Programme, set up the Collaborating Centre for Climate & Sustainable Energy Finance. The European Union is also supporting alternative energies in Africa, for example, through its Renewable Energy Cooperation Programme. At the first meeting of the Africa-EU Energy Partnership in 2010, the EU pledged five million euros for the first phase of the programme. A ten-year plan envisages creating at least an 
additional 15,000 megawatts (MW) of renewable energy capacities on the continent, including 5,000 MW from wind power and 500 MW produced by solar power. ▪

Add comment

Log in to post comments