Damilola Ogunbiyi: Growth in the Global South

0:00You can't get opportunity if you don't have energy. And we can't keep living in this world where we go, okay, you know, it's all right for these people to remain poor because these people have to retain being rich. We have to come up and really think about the Commonwealth and think, is it going to kill anybody for Africa to reach universal access? Can't the rest of the world give another 1 % to the carbon footprint to make sure a billion people get out of poverty? Those are the connections I really want to make and explain to people that everybody can do their bit.

0:44Welcome to the Future and Sound podcast. I'm your host, Jen Wilson. This is a podcast where we discuss people, planet, and profit. In each episode, we'll learn from world-leading experts who can help us see the future we want and our role in it.

1:10This is episode 40, Growth in the Global South.

1:20Damalola Ogumbi is the CEO and Special Representative of the UN Secretary General for the Sustainable Energy for All and co-chair of UN Energy. She was recognized in the 2024 Time 100 Climate List as one of the 20 titans in climate. She is the recipient of the First Class Order of Zayed II from the UAE President, in recognition of her contribution to the success of the Climate Conference COP28. She's also received the Global Female Leadership Impact Award in 2024, and the Energy Institute President's Award for 2023, in recognition of her continued role in solving critical global issues. She's been recognized as a trailblazer in her field by Reuters Trailblazing Women in Climate and Reuters Trailblazing Women in Energy, among others.

2:16With Mrs. Ogumbi at the helm, sustainable energy for all has entered into working relationships with over 200 partners, supported over 90 countries globally, and secured commitments of more than$1.4 trillion in energy finance. Now, if that's not a bio, I don't know what is. Tim and Lula, it is so nice to have you on the Future in Sound podcast. Thank you for joining me today. Thank you for having me.

2:46We've just shared the sort of formal overview on your background, and I'd just love to get your voice over, perhaps a 60 to 90 second background, capturing your experience from your point of view. Okay, again, thank you so much for having me. it's really important that we speak to different audiences and I'm a big fan of what you do. So I'm glad that I could finally be on this podcast. In terms of myself, I didn't kind of jump into the energy sector straight away. I went to boarding school in England. I was very privileged to do that. I went to university for project construction management and a bit of civil engineering.

3:23And I worked on site building buildings in England for many years. I got married and then my dear very Nigerian husband said we're moving back so we moved back to Nigeria you know I always feel like I'm a feminist but I moved because my husband told me to but it was it was really exciting to me when I moved back I decided I wanted to do something different instead of building buildings for rich people I wanted to work more in development so I was lucky enough to given the opportunity to work for my state government which is Lagos State which is a huge state. It's probably the fourth or fifth largest economy in Africa, 21 million people.

4:01So it's like a country, it's on its own. There I became the first female general manager of something called the Lagos State Electricity Board, of where I was responsible to doing about 100 megawatts of decentralized energy to schools, hospitals, and government facilities. This was a range of energy sources, but my real focus was on renewables, especially for schools and hospitals, which is my real passion to be honest. I got a few years doing that which was a lot of fun. I got a call asking me to join the president's team to be the basically the senior advisor to the president on everything power sector.

4:39I started that that was quite nice being in the presidency a lot going on you're now dealing with a with a country right and a country with over 200 million people and trying to find what is the most sustainable way to get people out of poverty. And I think a lot of people don't really make the connection between electricity and poverty. You know, you can't talk about getting people out of poverty and they stay in energy poverty. It doesn't, it doesn't work. So I worked there and then I was, again, I was very lucky to be appointed as the head of the Royal Electrification Agency, which is a massive agency tasked with bringing the people who don't have energy onto the energy ladder, which in Nigeria now is probably about 80 million people.

5:25So I got to the area and I started working a lot with the World Bank and AFDB, where at that time we were able to raise the largest energy access program, which was 550 million from the World Bank and the African Development Bank. And that was matched by Nigerian government. So it was a billion dollar fund focused on private sector, making sure that they basically connected people to renewable energy. So that happened, successfully connected about 8 million people to specifically solar energy, which is what I'm pretty much obsessed with and managed to train a cohort of amazing women. I'm very gender focused.

6:04So even in my program, when people said they didn't know women, I said, find women because you're not going to get the grant until you have some women in your organization. So after that, I got again, the opportunity I have now, which is to join the UN and be the Secretary's General's, you know, basically advisor on everything sustainable energy. It's been really kind of important to see what the global audience sees when you are in the country, because you don't realize how as a silo you are in the country, right? You feel like when you go out, you tell people the problems and they understand how amazing it is.

6:39And you forget all the different priorities with food, health, everything that everybody has and how you have to really really bring it together so something I tend not to say in a lot of um podcasts is I've actually matured a lot in this role um my diplomatic skills are now through the roof because I realize it's an environment where people actually have to like you which I didn't have when I was back home it was just about the work um and I also have to keep true to myself, which is with the amazing team that I have, if we don't implement, then I don't think we need to be doing it. So we don't do reports for reports sake or plans for plans sake.

7:20If I can't see the linkage with supporting the most vulnerable person, it's just not something we do. And that's what's been quite exciting. So this is year five or year six now. We have 20, 30 goals. There's a lot of people against us, but that's the exciting part, right? It's always easy when everything is easy, but when it's challenging, that's when real innovation comes through. And that's what, at least my organization, my amazing team, we're able to form. And we look forward to being on the other side of it. And the other side really is to try and get ourselves out of the job. So we're one of the few organizations that if we exist circa 2030, that means we haven't achieved our goals.

8:07So yeah, we're working very hard to make that happen. I know that was more than 90 seconds, but... It was a great overview. And I can really hear your commitment to outcomes, not just the reports, but to outcomes and how are we helping the most vulnerable people. And in your opening remarks, I really am curious to hear more about that interconnection between poverty and energy. For listeners on this podcast, many will be coming from a private equity investment background or they're business leaders. Just at a high level, Demolula, can you share with us just how you think about that interconnectivity between energy and poverty?

8:47Okay, thank you for that, because I do think that is really important. So we're living in a world where we still have about 666 million people with no access to electricity. So they're never going to hear this podcast that we're having today. We also have 2.1 billion people, mostly women and children that have no access to clean cooking fuels. You know, this is how people feed their families. So in terms of the energy poverty angle, let's take my continent, Africa, and let's break it down to maybe sub-Saharan Africa. Let's remove South Africa. The combined amount of gigawatts that are on the grid available is about 81, 82 gigawatts.

9:30To put that in comparison, that's the same as the country of Germany, right? So being born Black African like myself, I'm 20 times at a disadvantage in terms of the electricity I have than anyone in America. So I think maybe that puts it into context. So the average African, even when they have energy, middle class or people you call impoverty, even when they have energy, they have maybe 400 kilowatt hours. The average American have 13 ,000. So it's not just about energy, it's about energy to be productive, right? It's not just energy in the homes to turn on the light. It's energy for healthcare systems, it's energy for businesses, energy for industries.

10:13that's what we're trying to get to unless a lot of these things that we see around the world in insurgency in terms of refugees people don't leave where they're from if they have opportunity right that doesn't happen and you can't get opportunity if you don't have energy you know and we can't keep living in this world where we go okay you know it's all right for these people to remain poor because these people have to retain being rich and that's just the order of things. We have to come up and really think about the Commonwealth and think, is it going to kill anybody for Africa to reach universal access?

10:52Can't the rest of the world give another 1 % to the carbon footprint to make sure a billion people get out of poverty? Those are the connections I really want to make and explain to people that everybody can do their bit. Everybody, even if you're not directly giving money towards the cause, you can be efficient with the amount of energy you use, you know, to allow to have carbon spaces for other people to, you know, to come into play. The other thing I think it's important is that even when we say people don't have energy, there's still a lot of backup generation. So these are these generators that use diesel and petrol that are extremely harmful, but you can't tell people to stop using them, right?

11:35But if you look at the equivalent, the equivalent of like 700 to a thousand coal fired, you know, power plants, and those are running constantly. So even when we leave the poverty and people angle and just think about the climate, right? These aren't things you want people to continuously use because you can't police them. You don't know where they are. You know, they're not like these big power plants that you can turn off or turn on again. And that is what is really powering the, you know, the African continent right now. And that should be scary because it affects everyone. I think, you know, a lot of people just don't really understand how interconnected we are with climate and also with people.

12:15And so it sounds when we're talking about what's often missed in conversations about the energy transition, part of it is that energy, sort of that equity angle. And I'm wondering, what else is missed when we have these conversations? I think people miss the fact that you can't transition out of something you don't have. We have such an amazing opportunity that the people who don't have access to electricity and clean cooking fuels can get it clean from the start. And if we don't get it clean from the start, it will come dirty. And in 20 years time, I could be on a call with you telling you about how they need to transition.

12:52So there's a lot of countries that it's not about transition. It's about green growth. Let's just start green from the beginning. Let's skip the transition, right? That's what I think is missing from the conversation. All the technology is there because everyone goes, research technology. No, the technology is there now for us to make sure that people coming on the ladder is clean. What is not there is the funding and people not understanding that we need all types of funding on the table to make sure this is a reality. Because if it's not a reality, it affects us all. And in terms of the differences, you've shared some of the differences in transition versus green growth.

13:33Are there any other nuances to the differences between the global north versus the global south in terms of what's needed at a high level? You would really welcome any further comments on the different lens required. I mean, I think talking on finance is important, especially since you have a private equity group that listens to you. You know, I think there's also an unfair risk matrix when it comes to the continent and comes to the south, basically. You know, in terms of are you going to get your return for investment? How are you going to exit? You know, a lot of equity investors don't come in.

14:09Debt comes in instead of very, very high rates. so looking and not just taking the rating agencies and actually looking at projects that are bankable understanding that it you know Global South are one of the few places where you can get double digit returns it's not always just last mile you know grant-based projects they're actually you know some large generation projects and transmission distribution projects that that people could look into and then also understanding that this is the perfect place where you can do proper blended finance. We are currently working on a project supporting the World Bank and the African Development Bank on something called Mission 300 alongside the Rockefeller Foundation and the Global Energy Alliance for People and Planet, which is an amazing program to connect 300 million Africans to electricity by 2030.

15:03That is very important because this has to be done private sector led. And this is about 30 to 40 billion of concessional financing coming in to encourage private sector. So really, and I don't see we're going to get that kind of money into the sector and into the renewable sector, especially in the foreseeable future. So that's why it's really important to kind of listen to the private sector. What do you need? What tools do you need? Do you need us to engage? Do you need any government convenings? Because we need scale and we need people to move fast. You can imagine if we're trying to do this by 2030, all the projects and signs of financial closes have to be done by end of 2027.

15:43So that's what I would like to focus on. And one other thing I think it's also critical is we need to find a way to do a lot of more local currency financing, which isn't always exciting to international finances, I understand, but local currency financing is important because that's how people pay their energy bills. When everything is focused or it's paid for by hard currency, there's normally a mismatch. And you typically can't go, I mean, you can't do it in your country, you're not talking about mine. Go back to people and say, I'm sorry, there's been something about hedging the dollar so you have to pay 20 times more for your electricity bill.

16:23It just doesn't work like that. So finding ways and tools and financial instruments to allow to do more local currency is important. We need as a whole community to spend a lot more time on all the different financing innovations. So we've done a lot in technology innovation, but financing innovation is still lagging behind. Hey, it's Jen. I just wanted to take a quick moment to let you know a bit about RICO and what we do. We're a tech-enabled advisory firm that helps private market investors and companies measure sustainability metrics using our software platform. We also help you to set targets and focus your efforts on sustainability areas that really matter for your business.

17:07And finally, we help clients to translate all of this work into your core value creation strategy or your business model. Check us out at re.co.com to get in touch. All right, now back to our conversation. One of the things that struck me, Dama Lola, when you were sharing your overview of your background, You've actually had boots on the ground building projects. This isn't just a sort of cerebral theoretical exercise for you. And I'm wondering your point about really looking beyond a country level risk matrix and understanding a project. If you're a private equity investor with pressure to show returns and you saw opportunity in Africa, what would be some of the tools or the approaches that you would take to assess really strong projects and maybe tailor your assessment of risk and opportunity to be appropriate for the job?

18:07I think that's a really good question. I mean, first, I'd want to know what sector you'd be interested in. But there's a huge, there's now a huge resurgence of people doing CNI solar. So people providing solar and battery storage to actual industries in Africa. And they are doing dollarized PPA. So that's also, that's something quite interesting to people. Sorry, Damilola, what's a dollarized PPA for listeners if they don't know? It means a power purchase agreement with the customer that is in dollars. It's not in local currency, which is sometimes important to private equity. There are also quite a few funds.

18:49So I'll give you an example. We're working with Africa 50 and the Nigerian Sovereign Investment Authority on their decentralized renewable fund, right? That is a profit-making venture. So you could also look at all the different instruments that currently exist in countries, right? and who are the best partners in countries. So for anybody who are weak, we can help with that, but we need to understand what exactly you need. I do understand that a lot of private equity firms, they don't want to go spend$100 ,000 to$150 ,000 trying to engage what is happening in country or start doing feasibilities about projects that they don't understand.

19:28Sometimes they need just the basic information on the political risk, what type of guarantee structure is there, in the country, but also at the project level. And this is something, if it's on the energy space, we can, I think we as SE4 can help with, but we can also put you in touch with the people you need. There's a lot of information as well on websites like African Development Bank, and bringing those different tools together is important. I also think us in the energy sector, We need to do something more in terms of just roadshows to the private sector, to the private sector investors with country delegations to show that this is available and people are ready for business.

20:13I'm not under any impression that every country is viable, not at all, but there's, you know, it's building blocks, right? There's some countries that have been doing this and are viable now, like South Africa, Nigeria, the Kenyans, and the other countries are going to come up in three years and other countries are going to come up in five years. So it's almost to see, understand, you know, what is the risk appetite as well. The other thing we've been seeing, which has been really great is a lot of investments from more tech companies, right? Who are using energy as just an enabler to provide other things like, you know, AI resources, micro pensions, micro insurances on that same channel.

20:54So energy is in how they're making money. They're making money because they have all these different add-ons. But having an energy, having the, which is typically a larger mini grid, is the way that, you know, they can also offer these services seamlessly. And that's not something we knew would happen when we started this. This is really to kind of SMEs and larger scale businesses. And you touched on tech there for a second. And, you know, obviously at the top of this conversation, we were talking about energy equity and development and the intersection between energy and poverty. And then we also have these global phenomena around energy and AI.

21:36And I'm just wondering, when you look at some of the trends around artificial intelligence and additional requirements, we talked about population growth as being a stressor on utilities. It is, how do you think about energy and AI in the context of the global south? It's good and bad. The good outweighs the bad by far. The bad for me is I know just how much more energy is needed to power AI. So that sometimes gives me a little bit of heartache. And, you know, we're pushing with, we have this carbon-free 24-7 initiative with Google on trying to make sure that the energy that is used for AI is more carbon free.

22:22But on the flip side, we see opportunities coming up with different servers now on the continent. But more importantly, AI being used for predictability. So I'll give you an example. At Sustainable Energy 4, we create things called the integrated energy planning. Let me take Madagascar. for you to provide adequate car for your population, this is the least cost way to do that. That could be a connection to the grid. That could be a mini grid. That could be a small solar home system. Right. And this is how you do it. And this is this how you do it for clean cooking as well. And this is how you do for cooling, which people leave out when they're planning energy systems.

23:02But what AI allows us to do is allows us with the data to figure out two key things. First, what is the affordability and what is the willingness to pay? And they use different indices that we have, like telco data and everything to plan that this is how someone could grow. Right. So they might just need five light bulbs, one fan, a microwave today, but they're going to need a freeze freezer, a deep freezer in year five and stuff. So that for me has been really exciting. I think this is the first time that we can use big data to predict, but that does not take away going back on field to verify if this information is correct.

23:43I really don't want people to think that AI is going to solve that. But it allows us to predict, and that prediction is good because it allows us to be a bit more precise with the cost of it. And with the time where funding is so scarce, you cannot waste any money. so you want to have the best type of data to predict how much things cost and people's willingness to pay that's really clear I could ask you questions all day but I know you have a lot on the go so we're sort of you know turning the corner and we'd love to ask you a couple questions about how you think and how you stay up to date so starting with you know what do you listen to or read to keep up to date.

24:27There's so much happening in the energy space. So how, yeah, how do you, how do you stay current? I would love to say that every day I'm reading something. I'm not, I'm very big on data. So any kind of data geeky things, I'm always really excited when the SDG7 tracking report comes out. I obviously have to like know what's happening in current affairs. So like the Economist, the Financial Times is kind of my go to. But then like the IEA reports and the IRENA reports. But I also look to kind of the local news on on trends of what is working well. I don't believe that we just take tools from the global north and put in the global south.

25:07I will I try and find I'm more excited about case studies on what what what has worked well that can help the Commonwealth, you know, and you can tweak to suit certain environments. But now it's more, for me, with everything going on, it's kind of just being more strategic in terms of like, what can we do as an organization for the people we serve? So it's been a lot more conversations like that, which might not have been the way five years ago. Five years ago, we had a plan. We're going to hit the plan. But now we're kind of like, we're kind of having conversations like, We know everything we've just said is probably not going to happen.

25:49What do you do after that? Do you know? So it's taking a lot of time. It's taking a lot of resources with the travel. But it's just what we have to do. We have to recognize how privileged we are. And we have to adapt to support to make sure no one is left behind. And if you had to choose one book that's most shaped the way you think, what book would that be? Wow, that is actually a difficult one. And I really think it might just be in terms of very personal for me. It might just be the Bible. Although a lot of people think it's very contradictory, it does just give me hope. It gives me hope in human beings.

26:29I really believe in the power of people. What I write about the Bible and look about what we do in the UN is that the whole point of development is helping another human being, right? I think people forget that. more importantly helping just one other human being that you might never meet um and it's even more exciting with us because sometimes we're helping babies and anything you can do in life for a baby to survive I just feel like what else were you brought to this world to do right I sorry I get a bit deep about it like that's why we exist right to help people and I think that's what that's what the bible represents to me and that's what I really, really take from it.