Journal of African Business Issue 5
Welcome to The Journal of African Business - a unique guide to business and investment in Africa. Every edition carries editorial copy covering the following general topics, with a wide range of subjects within each broader economic sector: energy; mining and exploration; trade; finance; technology and tourism. In addition to this, special features on topical matters will be published periodically, along with country profiles. In this edition, the in-depth interview with Aggreko Head of Sales, Southern East Africa, Max Schiff, makes clear how important captive power is for the future viability of a wide variety of projects in Africa. As Schiff points out, the extractives industry has long been a leader in the application of captive power, given the remote location of many mining operations, but the flexibility and ESG advantages that captive power using renewables offers is making it an ever-more attractive option for many different sectors.
Welcome to The Journal of African Business - a unique guide to business and investment in Africa.
Every edition carries editorial copy covering the following general topics, with a wide range of subjects within each broader economic sector: energy; mining and exploration; trade; finance; technology and tourism.
In addition to this, special features on topical matters will be published periodically, along with country profiles.
In this edition, the in-depth interview with Aggreko Head of Sales, Southern East Africa, Max Schiff, makes clear how important captive power is for the future viability of a wide variety of projects in Africa. As Schiff points out, the extractives industry has long been a leader in the application of captive power, given the remote location of many mining operations, but the flexibility and ESG advantages that captive power using renewables offers is making it an ever-more attractive option for many different sectors.
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A NEW ENERGY BANK AIMS TO INCREASE PRIVATE<br />
INVESTMENT IN AFRICAN OIL AND GAS PROJECTS<br />
Afreximbank and the <strong>African</strong> Petroleum Producers Organization (APPO) have signed a<br />
memorandum <strong>of</strong> understanding (MoU) for the creation <strong>of</strong> a multi-billion-dollar energy bank.<br />
Tackling energy poverty in Africa will be at the heart <strong>of</strong> the bank’s mission.<br />
Global investors are shying<br />
away from hydrocarbons,<br />
leaving the continent without<br />
the investment it needs if it is<br />
to capitalise on its resources<br />
PPan-<strong>African</strong> multilateral trade finance institution, the <strong>African</strong><br />
Export-Import Bank (Afreximbank), has signed a Memorandum<br />
<strong>of</strong> Understanding (MoU) with the <strong>African</strong> Petroleum Producers<br />
Organization (APPO) for the creation <strong>of</strong> a multi-billion-dollar<br />
energy bank. Aimed at scaling up private sector investment<br />
in <strong>African</strong> oil and gas projects, the bank will provide critical<br />
financing for new and existing oil and gas projects, as well as<br />
energy developments across the entire value chain. Following<br />
international oil company divestment and the shift in global<br />
investment trends, the bank comes at a particularly critical time<br />
for Africa’s energy sector.<br />
The MoU was signed by Rene Awambeng, Director and Global<br />
Head, Client Relations, Afreximbank, and Dr Omar Farouk,<br />
Secretary General <strong>of</strong> APPO, in the presence <strong>of</strong> HE João Lourenço,<br />
President <strong>of</strong> the Republic <strong>of</strong> Angola, APPO ministers and <strong>African</strong><br />
Energy Chamber (AEC) Executive Chairman NJ Ayuk.<br />
While the developed world calls for the end <strong>of</strong> fossil fuels due<br />
to climate change, Africa continues to face the crisis <strong>of</strong> energy<br />
poverty. Over 600-million people lack access to electricity and<br />
900-million lack access to clean cooking solutions. This situation<br />
has led stakeholders to call for the rapid expansion <strong>of</strong> the oil and<br />
gas sector, recognising the role these resources play in making<br />
energy poverty history. Despite these calls, global investors are<br />
shying away from hydrocarbons, leaving the continent without<br />
the investment it needs if it is to capitalise on its resources.<br />
According to the AEC’s Q1 2022 report, “The State <strong>of</strong> <strong>African</strong><br />
Energy”, from the peak in 2014 at $60-billion, capital expenditure<br />
in Africa declined to $22.5-billion in 2020. Despite projected<br />
increases to $30-billion, significant levels <strong>of</strong> investment are still<br />
required and for this to happen, the role <strong>of</strong> <strong>African</strong> financial<br />
institutions is vital..<br />
Catalyst for Africa-directed investment<br />
Organisations such as Afreximbank have already made notable<br />
progress to drive oil and gas project developments. At the end<br />
<strong>of</strong> 2020, Afreximbank’s total assets and guarantees stood at<br />
14
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