Africa’s energy transition should be collaborative effort involving the public and private sectors, financial institutions and African governments, according to the AOW50 high-level panel discussion on the eve of AOW energy forum, which runs from 10-13 October in Cape Town.

AOW: Investing in African Energy was previously known as Africa Oil Week.

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 pre-launch event featured an onstage panel discussion, as well as a series of breakaway roundtables involving 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 shared goal of liberation from energy poverty. 

Combining gas and renewables

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.”

(Writing by SA Kader; Editing by Anoop Menon)

(anoop.menon@lseg.com)

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