The Energy Republic February Edition 2022

TOP STORY
assuming we build the needed infrastructure
line pipelines and show the wherewithal to do
it. small scale LNG can be a game changer as we
push to manufacturing, create jobs and defeat
energy poverty.
"I have traveled around Africa such as Senegal,
Mozambique, Congo, Equatorial Guinea,
Nigeria, Ghana, SouthAfrica, Namibia, Gabon,
Algeria and Tanzania, our energy Industry has
learned it needs a new approach that balances
people, planet and profits,"
African Energy Bank
Environmental organizations, financial
institutions, and governments across Europe
and North America have insisted that
developing nations, including those in Africa,
must immediately transition from fossil fuel
production and usage to renewable energy
sources like solar, wind, and hydrogen.
Africa has approximately 130 billion barrels of
proven crude oil reserves and over 15 trillion
standard cubic meters of natural gas which
hasn't been fully utilized.
Meanwhile, some prominent industry leaders
have said that it would be a mistake for Africans
to abandon their abundant petroleum
resources, to pursue expensive, unreliable
renewable energy sources.
The African Energy Chamber has made a strong
case to challenge this energy transition
agenda, noting that Africa still needs its oil and
gas resources to meet the Continent's pressing
needs and alleviate energy poverty.
Addressing energy poverty in Africa is an
urgent matter that must take priority over
abandoning oil and gas. The energy poverty
numbers for Africa are stark, while Africa
produces less than 4% of greenhouse gas. To be
factual, Africa isn't the problem of greenhouse
gases, but they are the victims. Though African
countries are embracing renewable energy
sources; but, the problem comes when the
continent is forced into giving up its fossil fuels
and transitioning to renewable energies.
In response to this ongoing energy transition
agenda, NJ Ayuk has said developing African
energy banks is a way to protect the continent
and harness its oil and gas resources for social
and economic transformation.
Ayuk stated that China might be a credible
partner to Africa in building these unique
financial infrastructures.
In his words, "African governments can set
aside a percentage of their oil and gas revenues
for new project funding. In our report, Africa
Energy Outlook 2021, the African Energy
Chamber projected that African governments’
earnings from royalties, profit oil, and other
taxes in 2021 would reach USD 100 billion. Even
5% of that amount would produce $5 billion
NJ Auk, Executive Chairman of African
Energy Chamber
that could be leveraged for exploration,
development, or infrastructure.
“
We can also raise
capital by investing
African pension funds
in African energy
projects.
According to Capetown-based investment firm
RisCura, local pension funds collectively
manage around USD 350 billion of assets in sub-
Saharan Africa, and they are actively looking for
new places to invest. Why not encourage them
to add oil, gas, and renewables projects to their
list? Investing pensions in the energy sector is
hardly a new practice. Some of America’s
largest pension funds are invested in fossil fuel
producers and pension funds around the globe
are investing in green energy projects. This
would not be a giveaway: Investing in fossil
fuels, especially gas projects and developing
marginal fields, provides a large return on
investment. And millions of Africans would be
participating in our growth and our future".
Other options for raising capital, according to
him, including seeking support from wealthy
Africans who want to invest in a better African
future. As of December 2020, total private
wealth in Africa totaled approximately USD 2
trillion. That’s not even including the African
diaspora.
"Imagine what can be done if we just unite. Not
only do we have pathways for raising capital,
but we also have an example of the kind of
bank(s) Africa needs to finance its energy
projects, one that goes back decades. I’m
talking about the African Export-Import Bank
(Afrieximbank). In 1993, African governments
worked with public and private investors to
create a bank that would finance, promote, and
expand intra-African and extra-African trade.
They succeeded. In 2020, Afrieximbank
received the Africa-America Institute’s (AAI’s)
Institutional Institution of Excellence Award for
its commitment to the creation and
implementation of the African Continental Free
Trade Agreement (AfCFTA) and its ongoing
dedication to investing in education. AAI noted
that between 2015 and 2019 alone,
Afrieximbank disbursed more than $30 billion
in support of African trade, including more than
$15 billion for the financing and promotion of
intra-Africa trade.
"Afrieximbank, by the way, recognizes the
importance of protecting Africa’s oil and gas
industry.
“The way we see it at the bank. I say, let’s build
on Afrieximbank’s model. And not only that,
let’s cultivate a pool of investors who
understand and appreciate the importance of
oil and gas to Africa.
"Capital from foreign countries and companies
will always be welcome — as long as it isn’t
predicated on phasing out fossil fuels on their
timeline. If they’re pushing a rush to
renewables, they’re not going to be part of our
solution.
"With the support of one or more African
energy banks, local oil and gas companies will
have the finances necessary to acquire assets.
They’ll have the financing to build crude and gas
pipelines across Africa and to facilitate the use
of natural gas (including liquid natural gas) to
power Africa, minimizing energy poverty and
driving industrialization.
"And African states and entrepreneurs will be
able to finance the development of renewable
energy operations, particularly blue, green, and
grey hydrogen operations that create additional
opportunities for Africans. Africa already has
emerging green hydrogen operations in Mali,
Namibia, Gambia, Senegal, Mauritania, Niger,
and South Africa, and with the proper funding,
could become a major green hydrogen
exporter.
"The African Energy Chamber will support the
energy bank initiative and work to bring
potential participants together.
“
Creating our institutions
to finance energy projects
will send a clear signal
to the marketplace that
Africans are seeking to
become leaders in scaling
up private capital.
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THE ENERGY REPUBLIC I SPECIAL EDITION