Shaping Greener Third World Growth
Looking to the near future, the next phase of economic evolution of the developing world in the globe’s poorest continent is on the horizon. Africa is now attracting international investment in its stores of natural resources that contribute to its ability to lift communities out of poverty. At the same time, history–even recent history–has shown that there are inherent dangers associated with periods of rapid growth.
A panel containing dignitaries from Ethiopia, Senegal and Sierra Leone recently marked the commencement of Sustainability Week 2014 in Abu Dhabi in its opening ceremony. Moderated by Dr. Adnan Z. Amin, Director General of the International Renewable Energy Agency (IRENA), each of the leaders were touting descriptions of an Africa that has grown away from the headlines of danger and conflict that many parts of the outside world associate with the region. Instead, the panel referenced democratically elected officials that comprise governments dedicated to transparency and accountability. Their accounts of their homeland pointed to areas of conflict that defined the minority, rather than the majority, of Africa.
With a continental average income of $309 in West Africa and $470 in Sub-Saharan Africa according to the World Bank, one can hardly blame African countries for their eagerness in capitalizing on projections of 5-6% annual GDP growth over the next few years, but the speed of development and deployment of global investment dollars brings with it potential pitfalls for how Africa emerges into the developed world–the results of which will define reality for these countries far beyond the life of this investment boom.
Green from the Start
History can point to the countless paths available to young economies for harnassing growth, but only a fraction of them are sustainable in nature–evidenced by the fact that we are virtually devoid of any successful examples in modern times. IRENA is an example of an organization focused on guiding the economic evolution of the developing world to a sustainable realization by laying the groundwork of infrastructure in renewable energy.
In concert with the Abu Dhabi Fund for Development (ADFD), IRENA recently announced $41 million in concessional loans for renewable energy projects to rural communities around the globe, including a location in Sierra Leone. As the first of seven financing cycles, the funds will provide up to 50% of project costs for a combined 35 MW of renewable power generation that spans across different generation technologies.
Thanks to a loan covering $9 million of an $18 million total cost, Sierra Leone will be able to realize a 6 MW grid-connected PV array that will provide grid stability and promote future capital expansion. Other projects include small scale wind, biodiesel, small scale hydro and waste to energy in places like Maldives, Mali and Ecuador. The beginning of the second cycle of project funding began immediately with 70 new clean energy projects having already applied for monetary support. Dr. Amin noted that, “One of the myths about renewable energy is that there are not enough bankable projects out there.” IRENA hopes to dispel this perspective which is why all of the projects they support need to be replicable and technically sound (similar in nature to the Wind for Prosperity partnership by Vestas & Masdar).
IRENA’s final choices for their first financing cycle highlight the strengths of their selection criteria as well as their goals. In much the same way as Masdar City continues to provide a tangible road map for urban possibilities in the developed world, IRENA projects will help to ratify the necessity and financial viability of a clean energy reality for the developing world. Combined with American and European leaders banning funding for the construction of most new coal plants in the developing world, these efforts can help ensure that future growth is much cleaner than it has been in the past. It was refreshing to hear Hailemariam Desalegn Boshe, Deputy Prime Minister and Foreign Minister of Ethiopia, highlight how important it is for younger economies “not to make the same mistakes that have been made by the developed world.”
Cleaner Power for Cleaner Cities
One of the challenges of these younger economies is to meet its rising demand without falling prey to overflowing speculation that can inflate the speed of building out new urban centers. The desire to attract investment has to be tempered with the time it takes to create viable plans for incorporating buildings, streetscapes, infrastructure and public space. This is an area where we are low on precedents. Tempered expansion in the developing world for the creation of great, new urban space is not often realized (if ever). Whether it is new explosive growth in China, oil boom towns in North Dakota, expansion in Mumbai or even construction in cities like Dubai and Abu Dhabi, the speed of realization has created cities that are fragmented, irrevocably car dependent, short on public space with pedestrian access and deficient in infrastructural programs. All to often new building stock resembles supplanted versions of western archetypes unfit for unique climates around the world rather than designing new solutions that are location-specific.
This rapid development has also led to urban vacancy rates of over 20% in Mumbai and over 30% in Chinese cities like Chengdu. As recently as the past 6 months, Dubai still suffers from office vacancy rates upwards of 45%, still searching for a recovery of economic stability after the crippling blow it received during the global recession. All of these locations can point to an unstable real estate market due to a glut of space driven by speculation.
On the other hand, Abu Dhabi does have a shining star of possibility: Masdar City and its masterplan for sustainable urban development in a harsh climate of the developing world. The relatively slow speed of development forced by recessionary pressures may actually be more of a blessing than a curse for the budding city, allowing the team of designers and planners the time and focus to consider alternatives and secure a solid foundation of guidelines and performance targets. The new city will be providing a new home for IRENA’s headquarters in a brand new building set to open later this year.
Hopefully, the continued progress of Masdar City will help produce a working model for sustainable urban development to help take the conversation out of theory-based debates. It may seem counter-intuitive that the first thing that a economy must do when faced with a rush of investment interest is slow down, but successful cities take time–especially in places without a lot of experience in them. Though a more difficult task, there is more resiliency in constructing an urban ecosystem that fosters a demand for space rather than building space to try and foster demand. The process of slowing down now will pay dividends in the future because it is much harder to unbuild mistakes in the cityscape (a reality the western world knows all too well).
Full Disclosure: Travel expenses to Sustainability Week were covered by Masdar
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