…A just transition must ensure fairness and equity especially where energy poverty remains widespread.
…Growing demands for energy across Africa need significant investment.
-Felix Douglas
There has been global concern about clean energy as the world gradually calls for phasing out of fossil fuels. But stakeholders and experts are perturbed that if fossil fuels fizzle out what will be the fate of Africa since the continent is still grappling with clean, affordable and accessible energy.
Energy transition is on the way, where will Africa get its funding from in a continent that is still struggling to survive with its vulnerability in terms of fund.
To this end, the Oil Trade Logistics Africa Downstream (OTL) had a webinar with the theme: “Interrogating Just & Inclusive Energy Transition for Africa” to mark the International Day of Clean Energy,
Adedoyin Pearse, an energy expert with Siemens Energy Venture was of the view that the importance of universal energy access, inclusion of marginalized communities and preservation of jobs must not be undermined.
Pearse said “Everyone must have access to electricity. It’s heartbreaking to know that even in countries like Nigeria, there are still communities that aren’t connected to the grid nor have power at all.”
According to Pearse, transitioning from fossil fuels to cleaner energy sources such as wind, solar, and hydro power could displace workers in industries like coal mining, creating a need for just solutions. “We have to think about what happens to workers in coal mines, for example, as we switch to cleaner fuels. The key is to ensure that no one is left behind as we transition. People’s livelihoods and communities must be protected.”
However, her concern has always been the views of many stakeholders that transition to clean energy might lead to unemployment especially the aspect of fossil fuels.
Pearse believed that the transition should be done in such a way that it will not lead to job loss. “A just transition means that we must ensure fairness and equity in how we move forward, especially in regions like Africa, where energy poverty remains widespread.”
Nigeria has vast untapped resources like wind and solar energy hence the need for a strategic shift in how financial backing is allocated to the country.
She pointed out the obstacles faced by African entrepreneurs and the energy sector as a whole stressing the continent’s enormous potential in renewable energy but funding remains insufficient.
One of Nigeria’s downstream giant Vitol was represented by Country Manager, Chibuzor Ifeanyi, who emphasized on energy investments in Africa, especially with regards to clean energy and challenges confronting the continent in terms of funding.
Ifeanyi made it known that the growing demands for energy across Africa need significant investment, dual role of green and brownfield projects contribute almost $35 billion annually to the continent. The shortfall in financing is substantial, referencing global figures, such as the estimated $200 billion in worldwide energy investments.
According to Ifeanyi, “Do the sums and you can see for yourself that the shortfall is quite significant.”
He underscores the critical need for investments in energy infrastructure adding that that financing options are not limited to cash alone, mentioning alternatives like commercial capital, concessions, insurance, and guarantees, all of which help attract investments and mitigate the risks of energy projects.
Ifeanyi spoke on Vitol’s transition within the clean energy space highlighting the fact that liquefied natural gas (LPG) has been in extremely high demand globally and some African countries like Mozambique and Angola have large LNG projects that are attracting investments and are calling the attention of investors.
He stated that “General trend is clear. LNG is in high demand, and several countries within Africa have massive LNG potential.”
The continent’s energy sector is increasingly pivoting towards more sustainable solution.
As one of the world’s energy giant, Vitol is involved in a range of clean energy initiatives in the areas of bio-LNG, sustainable aviation fuel and biodiesel.
The company is expanding its presence in renewable energy. He referenced Vitol’s subsidiary, VC Renewables, which operates 24 solar projects in North America, with more than 3 gigawatts of live solar installations and an additional 2.4 gigawatts of storage projects in the pipeline.
In Africa, Vitol has been taking active steps to address energy access and sustainability. In 2002, the company entered a joint venture with the Nigerian Sovereign Investment Authority (NSIA) to establish a fund dedicated to carbon abatement projects in Nigeria. The partnership, which started with a seed capital of $50 million, aims to promote cleaner energy solutions.
Vivo Energy, a subsidiary is committed to investing over half a billion dollars by 2030 to facilitate cleaner cooking technologies across Africa. The company is focused on developing infrastructure such as LPG (liquefied petroleum gas) terminals to support cleaner cooking solutions for millions of households on the continent.
Expressing her views on energy transition in Africa, Chief Executive Officer, Guuru Energy in Kenya, Ogutu Okudo, pointed out that the role of regional cooperation in Africa’s energy transition is significant for its future. She emphaisised on cross-border collaboration which is key to impede barriers in the region.
Okudo stated further that “In East Africa, we’ve seen some success with countries like Kenya, Uganda, and Rwanda connecting their national grids,”
This regional cooperation has been invaluable. For example, when Kenya has faced national power outages, we’ve been able to rely on neighboring Uganda to supply power. This interconnectedness is critical for the future of Africa.”
Also, “There are challenges with cross-border integration, especially when it comes to aligning national grids and energy policies.”
The need for interconnectivity is clear. It is essential not only for providing stable power but also for promoting economic growth and job creation across the continent.”
Africa needs cooperation and every country should be involved in the process.
Despite these challenges, success stories like East Africa’s grid integration show that regional cooperation is not only possible but also essential for achieving long-term energy goals. The hope is that these examples will inspire other regions to adopt similar approaches, ultimately leading to a more unified and resilient energy sector across Africa.
She highlighted that the energy demand across the globe is expected to grow significantly, particularly in newly industrialized and less economically developed nations.
She said between 2010 and 2021, global energy demand grew by approximately 1.5%, and projections for 2035 suggest a sharp increase. A large portion of this growth will come from emerging economies, with Africa positioned to contribute significantly to the global energy demand.
Managing Director of Africa Inspect, Ian Brown said Africa has opportunity for energy transition. The continent with its vast natural resources has many issues that impede economic growth, sustainability, and cleaner energy.
Brown pointed out clearly that the immense potential African continent hold which is thirty percent of the world’s critical minerals is vital for energy transition.
These critical minerals, which include rare earth elements like cobalt, nickel, and lithium, are essential for the production of clean energy technologies. From wind turbines to electric vehicles, these minerals are key to reducing global carbon emissions and achieving the goals of the Paris Agreement.
According to Brown, Africa’s resources have been historically underutilized or exploited, and it is time for the continent to take control of its own economic future.
Cleaner energy in Africa which also metamorphoses to its transition can only be actualized through cooperation and funding.
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