As the world continues to call for renewable energy to replace fossil fuels, the Africa Petroleum Producers Organisation (Appo) is questioning whether it is reasonable to expect Africa to transition at the same pace as the West.Speaking at a recent event in Cape Town, Appo secretary general, Dr Omar Farouk Ibrahim, said it was unreasonable to expect Africa to turn away from the potential of its oil and gas resources.He said it begged the question of whether Africa was on the same path as developed countries in the “move to renewables – euphemistically called the energy transition”. “African leaders are signatories of the 2015 Paris Agreement and the continent is on board this transition train. The more appropriate question is, should Africa be on that same global transition train considering it has contributed less than 3% of global greenhouse gases?”Ibrahim said there was an increased call for Africa to remove itself from climate agreements as the West had lost the moral right to ask the continent to conform to these goals. This, however, was juxtaposed with those who believed the continent had to contribute to climate change initiatives as it was a universal challenge and Africa would be the worst hit if nothing was done to stop it.Africa's obligationsIbrahim said amidst the climate crisis challenges, Africa’s oil and gas sector was facing several critical challenges, of which financing was probably the biggest.“Studies have shown that for the past 100 years African oil- and gas-producing countries have relied on foreign finance for their operations. Many of these countries have not ended all financing of fossil fuel projects, begging the question of how the continent is going to fund its oil and gas projects – or are we simply going to declare them stranded resources?”He said with over 125 billion barrels of oil and trillions of cubic feet of gas, walking away from these resources was not an option.Climate change measures must be adapted“Appo is not contesting the science of climate change. We accept that it is real and are not against the introduction of measures to save the atmosphere from harmful emissions,” he said.These, however, could not just be uniformly imposed on countries without taking into consideration socio-economic conditions. Countries in Africa could not just be expected to stop oil and gas investment and focus only on renewables, in light of the energy transition.He said the reality, however, was that funding requirements for the oil and gas industry in Africa far exceeded the capacity of any one country on the continent. Considering that the developed world was not going to change its position on oil and gas and investment into the hydrocarbons would continue to diminish, African countries needed to work together to address the funding crisis.“When we pool resources together, we can sustain interest and investment into the sector,” said Ibrahim.Partnership with AfreximbankWith this in mind, Appo has formed a partnership with the African Export-Import Bank (Afreximbank) to create a facility that can fund oil and gas projects. He said both parties were collaborating on the establishment of the African Energy Transition Bank in support of an Africa-led energy transition strategy. “We have reached advanced stages of negotiation and the bank should be operational by early 2023. From the inception, it will have $6 billion of funding available.”According to Professor Benedict Oramah, president of Afreximbank, the emergence of the African Energy Transition Bank will enable a more efficient and predictable capital allocation between fossil fuels and renewables.Ibrahim said it was representative of Africa taking its destiny into its own hands. “For too long we have looked outside for solutions to our challenges – access to finance, access to technology, access to markets – and so on. We have come to believe that without foreign support we cannot make any progress in addressing these challenges on the African continent.“It is a clear indication of the changing orientation of Africans to how to address their challenges. How else do Africans expect to harvest the 125 billion barrels of crude and over 500 trillion SCUF of gas when the traditional financiers have decided to abandon the continent? How else do we manage the impact of climate change on the continent without the resources to invest? How else can we give access to energy to 600m people on our continent who have no access today?”Transition requirementsHe said Africa’s energy transition could not be done at the cost of its oil and gas sector. “Africa is fully supportive of the fight against climate change because we bear the biggest brunt and we contribute the least carbon emissions, but we must engage in the fight in a collaborative and just manner.” Ibrahim said the African Continental Free Trade Area (AfCFTA) would only assist in the continent working together going forward. “Yes, it has been late in coming, but rather late than never. It will be most auspicious for the success of several oil and gas projects on the continent, as well as enable infrastructure establishment across the continent.”
