Industry organisation the African Energy Chamber (AEC) has published its 'State of African Energy 2022' report, which highlights the need for a balanced and Africa-centric energy transition that incorporates the needs of the African continent within global climate mitigation strategies.
Specifically, the report offers an African perspective to the global energy transition dialogue, emphasising how the continent needs to prioritise making energy poverty history while simultaneously ensuring carbon emissions are reduced, the AEC says in a statement.
The outlook emphasises that holding significant resources does not necessarily result in accelerated socioeconomic growth. Rather, supportive regulation, market-driven policies and investment-friendly fiscal terms are critical if the continent is to realise its energy and economic objectives.
Further, with the world competing for global capital like never before, the AEC’s outlook emphasised the role that regional cooperation, harmonised regulations and attractive business landscapes will play in 2022 and beyond.
“Successful energy transitions will require the proper stewardship of countries' natural resources. There are challenges of upstream capital expenditure and competition for global capital. Asia has an appetite for African oil and gas and we have to raise our game.
“Governance and stewardship are key. We are running out of time to ensure we put up the proper structures in terms of regulations and governance to make more attractive for investors,” said AEC advisory board member Rolake Akinkugbe-Filani.
The outlook provides global and African stakeholders with a detailed understanding of current and emerging investment trends, offering up data-based solutions to the challenges faced by the industry.
By and large, there are some green shoots, which should be taken advantage of for the good of the African continent. As the world is moving along the transition, the pace at which Africa can move should be taken into consideration. The green shoots are there, they must be taken advantage of by different countries, said AEC advisory board member Nosizwe Nokwe-Macamo.
“Better economies of scale are achieved when projects are regionalised and countries and companies reassess the manner in which deals are structured. Harmonisation of regulations is necessary to start having cross border collaboration in terms of finance.”
“How do projects secure financing? By thinking creatively about deal structures, together with risk mitigation, strategic partnerships and what it takes to make a sustainable and attractive fiscal regime,” said American Petroleum Institute chief economist and AEC advisory board member Dean Foreman.
Further, Africa’s greatest resource is people. With a combination of people, technology and banks, and perhaps cooperation, people can take the lead in lowering their own costs and bringing more development across the continent, stated Foreman.
“The need to alleviate energy poverty is one of the things that absolutely must be addressed when you consider the energy transition. These are important considerations where it is easy to get lost in the global energy transition dialogue,” he emphasised.
The report outlook supports assessment of Africa’s natural gas future and details challenges, opportunities and innovative solutions to accelerating growth.
“Most large-scale gas projects taking place in Africa have cross-border dimensions and, as far as these projects are concerned, there are strategic consensuses that have to be reached, because we have to harness these resources for our economies,” stated Akinkugbe-Filani.
More than 600-million people in Africa do not have access to energy and the continent needs to reduce its emissions.
“Energy poverty is a big priority for the African continent and, if we look at what is happening today with the impact of the Covid-19 pandemic and recovery growth, addressing poverty should be the focus of Africa’s agenda,” she said.