Two weeks of debate and discussion at the COP27 UN Sharm el-Sheikh conference have now passed. The dust is beginning to settle and its time to assess What’s in it for Africa. There are some very glaring and disturbing facts that deserve more than passing attention.
Firstly, the African initiative entitled AJAETI (Africa Just and Affordable Energy Transition Initiative), a name adopted with little thought to what its purpose and strategy should be. The Sharm el-Sheikh communique plainly states that $100Billion pledged in 2020 to assist under-developed economies has not been fulfilled. Now AJAETI is committing itself to new donor pledges:
“ Governments took the ground-breaking decision to establish new funding arrangements, as well as a dedicated fund, to assist developing countries in responding to loss and damage. Governments also agreed to establish a ‘transitional committee’ to make recommendations on how to operationalize both the new funding arrangements and the fund at COP28.”
If commitments for 2020 have not been addressed, is it any wonder that the establishment of AJAETI has gained little or no legitimacy and will remain a paper tiger?
Then there is the matter of Agenda 2063: “Africa We Want“, proposed by the African Union which has seven lofty goals:
- A prosperous Africa based on inclusive growth and sustainable development.
- An integrated continent, politically united based on the ideals of Pan Africanism and the vision of Africa’s Renaissance.
- An Africa of good governance, democracy, respect for human rights, justice and the rule of law.
- A peaceful and secure Africa.
- An Africa with a strong cultural identity, common heritage, values and ethics.
- An Africa, whose development is people-driven, relying on the potential of African people, especially its women and youth, and caring for children.
- Africa as a strong, united, resilient and influential global player and partner.
Who could fault such lofty aims? Yet such promises fall on deaf man’s ears when viewed with what is actually happening on the ground. The Energy Progress Report 2022 shows that 568Million people in Sub-Saharan Africa has little access to electricity and 900Million Africans have no access to clean cooking fuels and technologies.
Coupled with unkept promises of funding from 2020 and hollow pledges for new additional funding beyond 2022 is it not time to conclude that COP28 has no basis for success and has lost its legitimacy before actually happening?
What to do?
COP27 was attended by a garden variety of people—200 countries, politicians of all stripes, lobbyists representing business interests of the most diverse sort, and NGOs proclaiming doom and gloom—all eager to save our little planet. Under the best of circumstances, it would be impossible to cobble together an agenda for such a diverse group of people. A recipe for disaster.
The results of COP27 have been predictable: At one end of the spectrum, a proposal to start AJAETI(Africa Just and Affordable Energy Transition Initiative) which already has a dubious beginning and at the other end of the spectrum the Africa Union’s pledge of Agenda 2063, promising Africans heaven on earth.
What to do?
Firstly, a decoupling from COP28. An African Energy Renaissance has little to do with the Agenda of COP27 with its key emphasis on CO2 reduction. Not one African country, in terms of CO2 emissions, is even mentioned as a key emitter (see chart below).
Secondly, the need to ensuring a more focused agenda. Having an agenda and summit for CO2 rich-countries and a sequel second summit for developing economies to discuss strategy and implementation of their energy transition plans. It is only by decoupling these two groups that it will be possible to have a semblance of any meaningful discussions which avoids a Tower of Babel confusion.
There is also a high need to dispel a number of illusions that continue to exist. For starters that the oil majors have contributed a net worth to Africa’s economies. According to Toyin Akinosho, publisher of Africa Oil+ Gas Report, African revenues from the oil and gas majors are financing the energy transition in the rest of the world: “. . . the oil majors are funding clean energy from the balance sheet of dirty oil.”
Around 30% of TOTALEnergies’ production is in Africa, but less than 0.5% of its new energy investment will directly benefit the continent. Yet, according to Akinosho, TOTALEnergies is the best African renewable energy investor out of the six majors. These include:
- ENI: Launched with fanfare the installation of a 14 KW solar system in a medical facility in Angola. In Egypt, where ENI is a major player, the company has not featured in the country’s relatively aggressive renewable energy plan.
- BP: The company has pumped over a billion barrels of oil out of Angola in the last twenty years but has excluded Africa from all of its renewable energy plans.
- Equinor: It pumps 120,000 BOEPD(Barrels of oil equivalent) in Angola but has no plans for renewables.
- Chevron: Its focus is not so much on investing in stand-alone renewable projects but increasing renewable power in support of its business to lower its carbon intensity.
- Shell: The company will likely take $7.5Billion out of Nigeria from 2021–2025. Shell has funded some off-grid projects through solar developers in Nigeria, which basically represents Shell’s footprint in Africa.
Nor should we imagine that national oil companies have a better track record. Africa’s two major national oil companies in Sub-Sahara Africa—Nigerian National Petroleum Corporation (NNPC) and Sonangol (Angola)—have demonstrated little hope of becoming national energy champions.
Take the Nigerian Petroleum Development Company (NPDC), the operating subsidiary of the NNPC, which “is a massive incompetent wrecking ball, which has been gifted joint-venture participation in 10 mining leases (OMLs) all of them producing.”
The NPDC is seen as a bright star within the NNPC’s portfolio. Why? Because the degree of its performance is in direct proportion with the help it gets from its partnership with other oil majors.
Sonangol, the Angolan state oil company, has had a rocky ride since 2017. In the past Sonangol had two roles: that of concessionaire, a highly judicious key role that gave it power and legitimacy, and being a state oil company with its responsibilities for exploration and development of the resources. Sonangol was then stripped of its concessionaire role, which was given to the newly created National Agency of Petroleum, Gas, and Biofuels.
In Angola today, power has become diffused. Sonangol has been stripped of its concessionaire role and is loaded with a mountain of debt, and the IOCs have the freedom to explore and market their natural gas. Developing green energy is certainly beyond the competence of Sonangol.
Instead of prescribing new energy directions for Africa I recommend no prescription. Africa must choose its own energy transition path.
Perhaps the last word can be given to Tony Attah, former CEO of Nigerian Liquified Natural Gas (NLNG). At the February 2022 SAIPEC conference (Sub-Saharan International Petroleum Exhibition and Conference)he stated:
“We need to promote Africa to become an energy market of its own by deploying the resources in Africa especially gas for the use of Africa essentially, creating dedicated gas hubs, storage and markets to take advantage of the opportunity to use oil and gas locally to develop and support domestic economic activities like gas to power, feedstock for petrochemicals, feedstock for fertilizer, gas to transport and as a catalyst for industrialization with LPG as a substitute for biomass.
While fossil fuels will continue to be relevant in the global energy mix, renewables will achieve greater growth with gas as the transition fuel for a very long time. That said I personally believe that energy transition is a given and the global energy mix will change whether Africa is ready or not.”
Gerard Kreeft, BA (Calvin University, Grand Rapids, USA) and MA (Carleton University, Ottawa, Canada), Energy Transition Adviser, was founder and owner of EnergyWise. He has managed and implemented energy conferences, seminars and university master classes in Alaska, Angola, Brazil, Canada, India, Libya, Kazakhstan, Russia and throughout Europe. Kreeft has Dutch and Canadian citizenship and resides in the Netherlands. He writes on a regular basis for Africa Oil + Gas Report, and guest contributor to IEEFA(Institute for Energy Economics and Financial Analysis). His book ‘The 10 Commandments of the Energy Transition ‘is on sale at https://books.friesenpress.com/store/title/119734000211674846/Gerard-Kreeft-The-10-Commandments-of-the-Energy-Transition