Africa’s energy transition needs to be managed in partnership between Africa’s energy stakeholders in a way that benefits all of its people. This will require collaboration across the public and private sector, between financial institutions and between African governments.
This message of continental solidarity was a key theme emerging from a high-powered panel discussion AOW50 on the eve of Africa Oil Week (AOW) 23, which runs from October 10-13.
The event was held under Chatham House rules which precludes speakers from being directly quoted. The frank discussion featured energy ministers from major African economies, leaders of financial institutions, as well as representatives of major private-sector energy organisations.
“By competing with each other, African nations become caught in a race to the bottom,” said one of the keynote speakers. “We must break out of this pattern. Development is not a beauty contest. We must not compete – we must complement each other.”
The AOW50 pre-launch event featured an onstage panel discussion, as well as a series of breakaway roundtables involving an exclusive group of energy sector leaders and opinion-makers.
Speakers noted that every African economy had different resources, and therefore their energy transitions would look different. However, by collaborating on developing policy, African nations could achieve a goal shared by all African nations: the liberation of Africa’s people from energy poverty.
Another notable theme was the importance of natural gas as a transition fuel. One speaker noted that financing of new projects was easier when projects involved gas and renewables, as opposed to the more established model of gas and oil.
“Capital follows sustainability,” said another speaker. “But we must consider that Africa will take time to build a renewal energy portfolio. Therefore, there will remain a place for oil and gas for many years to come. Gas projects are far more attractive to investors when they are part of a wider energy mix involving renewables.’’
It was also emphasised that African economies needed to build stability in order to attract the financing that is the lifeblood of all energy projects.
“There needs to be stability to attract finance,” said another speaker. “African nations should also look to leverage the African Continental Free Trade Agreement (AfCFTA) to build a coherent policy for capital and investment that will help move projects forward across African regions and regardless of regime change in any one country.”
Many country representatives noted challenges unlocking the value of their energy resources for their people due to anti-hydrocarbons activism, poor credit ratings and challenges in raising capital to fund infrastructure.
There was also an assertion that African countries had the right to continue exploration, development and production of their own resources.
“We retain the right to explore the responsible development of our own natural resources for the benefit of our people,” said a speaker. “That is what we are here to discuss – how we can use our energy assets to create wealth for Africa.”
These discussions set the tone for the conference taking place in Cape Town this week, AOW is a premium forum for stimulating deals in the African energy sector. It is being held at the Cape Town International Conference Centre 2, with the theme “Maximising Africa’s Natural Resources”.
