Under-development of sub-Saharan Africa’s considerable energy resources is holding back economic and social development in the region, the International Energy Agency (IEA) says.

In its first comprehensive analysis of sub-Saharan Africa’s energy systems, the IEA has found that 620 million people – two-thirds of the population – live without electricity, while 730 million rely on fuelwood and charcoal for cooking. It also says that many investments made in the region’s energy sector have enabled export of resources such as oil.

Sub-Saharan Africa is endowed with huge renewable energy resources as well as natural gas and oil, says the IEA. Investments have been growing since 2000, but relatively little has been invested in infrastructure such as power grids and gas transmission pipelines that could serve the needs of African nations’ populations and industries.

"The energy sector is acting as a brake on development, but this can be overcome and the benefits of success are huge," said IEA Executive Director Maria van der Hoeven.

The IEA’s report finds that grid-based power generation capacity falls very short of what is needed, with half of it located in South Africa. Insufficient and unreliable supply has also resulted in large-scale ownership of costly back-up generators.

"Economic and social development in sub-Saharan Africa hinges critically on fixing the energy sector," said IEA Chief Economist Fatih Birol. "The payoff can be huge; with each additional dollar invested in the power sector boosting the overall economy by $15."

The IEA believes that investment in the region’s power sector, improved cooperation and integration as well as better management of energy resources and revenues would bring economic growth as well as improve electrification rates.