Session moderator Ahmad Damcida, Founder and Principal of Energy Culture of Nigeria, argued that Africa’s energy transition cannot be considered ‘linear’ because of the need to satisfy the Triple A’s ‘in a dynamic manner’ for the continent. He recognised that there is a conflict between Africa’s express need to industrialise and taking an active part in the global push towards the energy transition.

Despite the current debate between promoting fossil fuel developments and rolling out renewables, he pointed out that Africa has been a major player in renewables from day one, ‘having the highest number of hydroplants in the world, as well a lot of carbon sinks – forests – across the continent’. Damcida said it is unrealistic for Africa to abandon investment in fossil fuels reserves that have been discovered lately on the continent, to tap into renewable energy resources alone, while other nations have benefitted from their fossil fuel reserves.

Furthermore, there is the widely-held argument: ‘We didn’t contribute much to these emissions that we are being asked to mitigate… Now it’s our turn to industrialise, how come some of these hindrances are coming to the fore?’ he asked. According to the United Nations Framework Convention on Climate Change (UNFCC), Africa is only responsible for 2–3% of global greenhouse emissions.

Dr Sheila Addo, Deputy Chief Executive of the National Petroleum Authority (NPA), Ghana, emphasised that many in Africa are energy-poor, with over 600 million lacking access to electricity and about 900 million without access to clean cooking fuels. Therefore, ‘the lowest hanging fruits for access to electricity and clean cooking fuels are the hydrocarbons that we see today’.

Although energy policy is often seen as ‘an emotional argument’ she preferred to focus on the economic argument. ‘We cannot transition at a pace at which more advanced countries are transitioning. When they set 2030 targets for the UN SDG [Sustainable Development Goals], countries like Ghana are setting a nominal target for net zero of 2070 – but can’t promise full transition.’

‘We have an ambitious plan, with some [decade] targets based on environmental and climate change policies, and a robust plan to get everybody on board (including local farmers),’ she explained. Notably, the plan includes electricity production based on natural gas, and nuclear power at some time in the future. Downstream, there is heavy promotion of compressed natural gas (CNG) for vehicle use, and liquefied petroleum gas (LPG) as a transition fuel for clean cooking, as well as biofuels in the energy mix.

Ghana also claims to have been the only country in West Africa to have moved towards low sulphur fuels, importing fuels with 50 ppm sulphur content compared to 1,500–3,000 ppm in neighbouring countries. However, Addo admits there are protectionist mechanisms which allow existing refineries to use higher sulphur content crudes, in order to be ‘economically sufficient’.

Furthermore, tree planting is encouraged as an ‘unsophisticated route’ to create carbon sinks. There are also solar, wind and hydropower initiatives. However, the National Petroleum Authority is trying to pace the transition so that ‘Ghanaians get economic benefits and not a sharp transition where we lose out’, she said.

The Afreximbank is considered to be a ‘rainmaker’ on the continent and is reputedly ‘the lender of last resort’, supporting policies that align productivity, energy security and the efficiency of energy utilisation.

‘Industrialisation is one of the key pillars as we try to create balance while financing Africa’s energy security,’ remarked Peter Olowononi, Anglophone West Africa Client Relations Director of Afreximbank. He sees the volumes of African crude oil being exported to refineries around the world as ‘irreconcilable’ with the continent’s own wealth creation. He cited the Bank’s ‘deliberate intervention strategy’ to convert the Gulf of Guinea into a refining hub, working closely with the Nigerian National Petroleum Corporation (NNPC) to develop a few modular refineries – aiming to make the Gulf of Guinea a net exporter of refined products in 10–15 years.

Afreximbank is also working with national oil companies on a gas flare commercialisation programme, to capture gas (which previously was flared) to LPG as a clean cooking fuel. The Bank is also involved in financing the massive AKK (Ajaokuta-Kaduna-Kano) natural gas pipeline, a major infrastructure project in Nigeria.

Afreximbank is also investing heavily in the renewable space. It helped commission one of the biggest battery energy storage systems (BESS) co-located with solar PV in Scatec’s Kehardt site, South Africa.

In Zambia and the Democratic Republic of the Congo (DRC), the Bank is also creating Special Economic Zones for development of battery electric vehicles (EVs). ‘In a spirit of collaboration we are creating a phased transition in Africa, from renewables to tree planting, refinery optimisation and emissions mitigation to produce higher grade fuels, and biofuels for blending with traditional fuels,’ said Olowononi.

Like the rest of the panel, he emphasised the importance of collaboration and quoted the popular saying: ‘If you want to go fast you go alone. If you want to go far you go together.’ Indeed, several of the African banks, including Afreximbank, the African Finance Corporation, the Trade and Development Bank of East Africa, and the Ecowas Bank of Investment and Development, have joined forces in order to bring Africa a ‘just and equitable transition’.

Building sustainability is a priority today, and NNPC is driven by six strategic sustainability action pillars in its ‘Action not words’ programme:

1. Innovation and technology leadership
2. Low-carbon energy initiatives
3. Sustainable economic development
4. Global leadership and policy alignment
5. Climate resilience and adaptation
6. Environmental stewardship and biodiversity protection

‘All of these are aimed at making sustainability become reality, creating cleaner energy, aligned with global policies,’ said Uzoma Emelife, Managing Director of NNPC Trading.

Dr Addo of the NPA was also concerned about the need for better collaboration in Africa. She said that considering the African Union Agenda (2023) aims to foster a unique voice across the world, particularly for the energy transition, only one of several pillars has been achieved: AFSA – the Alliance for Food Sovereignty in Africa.

‘We’re still having issues about trade with other African countries. The NPA supervises exports of petroleum products to other landlocked neighbours, but still has forex [foreign exchange] challenges, because the preferred trading currency is the dollar,’ she said. Furthermore, there is lack of standardisation regarding fuel specifications across the continent.

Olowononi also complained of the ‘lack of mustering our strengths together’, despite the creation of the West Africa power pool and the Southern Africa power pool in 1995, in a bid to create equity of energy initiatives across various member states. ‘We need to collaborate more, so we can leverage each other’s strengths, energy resources and financial resources,’ he said.

Emelife concurred. ‘We have infrastructure challenges, high population, high energy demand but low electricity supply. All these spell out the reasons why we are aggressively venturing into gaining better energy security. When we have that, energy sustainability will become a reality.’

• Further reading: ‘Retaking control: Africa boosts indigenous participation in oil and gas ventures’. Significant M&A action is underway in Africa as indigenous operators take over from the oil majors. Find more about the latest state interventions and moves towards resource nationalism in the Anglophone countries of Angola and Nigeria, and Francophone Africa, particularly in Gabon.
• South Africa has struggled to keep its lights on over the past four years. Corruption, mismanagement, theft and delayed projects have all taken their toll on a creaking electricity grid, while setting back plans for an energy transition towards renewables. But with a new broad-based coalition government elected to power in May 2024, and a newly created stand-alone Energy and Electricity Ministry, there is optimism that power generation issues will be resolved going forwards.