Decarbonization in small island developing states?

In our World Bank Energy Team for Southern Africa, we have the pleasure of working on energy programs in both South Africa and São Tomé and Príncipe, a small archipelago on the Equator in the Gulf of Guinea. The two countries could not be further apart: 60.4 million people versus 232,000 people; current dollar GDP of $377.8 billion versus $603 million; electricity production of approximately 212,000GWh versus 110GWh in 2022; CO2 emissions from fuel combustion of 394 Mt versus 132 kt. Yet, in both countries, we are talking about the importance of decarbonizing the energy sector.

Let us be clear: the fight to limit global warming to 1.5 °C above pre-industrial levels will not be won through efforts made by countries such as São Tomé and Príncipe. In fact, it will not be won with the combined efforts of many countries in Sub Saharan Africa (SSA) either. About 60% of the world’s greenhouse gas emissions come from just 10 countries. The 100 least-emitting countries, including São Tomé and Príncipe, contribute less than 3% of global emissions. Nigeria and Ethiopia, with the highest populations in SSA (223.8 million and 126.5 million people, respectively), emit 100 Mt CO2 and 15 Mt CO2 respectively, while the United States, with a population nearly equivalent to the combined population of these two countries has 40 times the emissions at 4,607 Mt CO2.

For small island states like São Tomé and Príncipe, decarbonization is about survival and economic growth. Currently, 95% of the country’s electricity mix is based on costly, imported diesel. As a result, a significant share of the state budget goes towards paying for diesel -- resources that could be better spent on improving the quality and access to health and education services, strengthening social protection programs, and boosting climate resilience. Severe flooding and landslides from two extreme weather events in 2021 and 2022 led to loss of lives and reconstruction costs estimated at 7% of GDP. And when the money or the fuel runs out, the situation gets desperate. For a two-week period in June 2023, there was no fuel in the country, neither for electricity nor transportation, grinding the economy to a halt. Hospitals could not provide critical services to the sick; there was no connectivity—physical or digital; and people and markets did not have access to fresh produce.

Climate action is development action. This is why the government of São Tomé and Príncipe recently approved a Plan of Action for the Decarbonization and Resilience of the Energy Sector (PADRES). As presented recently at a business meeting at the World Bank, São Tomé and Príncipe’s action plan sets out an ambitious program towards affordable and sustainable universal electricity access by 2030 (SDG7). It defines policies and short-term investments for a transition away from diesel-based electricity production by 2030, a 50% increase in access to clean cooking, and a reduction in fuel use in the transport sector, as the basis for the country’s transformation towards a resilient economy.

Recognizing that installation costs for renewable energy projects is 10-20% higher in small island developing states such as São Tomé and Príncipe than in other countries (with some studies indicating a premium exceeding 50% ), the country is seeking critical funding for its energy transition–including from climate funds motivated by emission reductions and other climate goals.

As it seeks to build a broad coalition of partners and supporters to help finance its transition, it is clear that the country urgently needs a new energy model. Only with reliable and affordable energy access will São Tomé and Príncipe–like larger states elsewhere, including South Africa–be able to tap the potential of its youthful population, spur economic growth, and create jobs.