Given that Africa contributes less than 4% of global greenhouse gas emissions, AFC has identified three strategic pillars for an African energy transition beyond decarbonization, namely: enabling localization, rebuilding infrastructure and developing Africa as a manufacturing hub and fostering financial innovation.
Present at the investors’ breakfast were HE Gabriel Mbaga Obiang Lima, Minister of Mines and Hydrocarbons of Equatorial Guinea, and HE Mahamane Sani Mahamadou, Minister of Petroleum, Energy and Renewable Energies of Niger. Notably, Equatorial Guinea recently joined AFC as a new member state, granting the Central African producer an increased investment allowance, privileged access to AFC structuring and lending solutions, and reduced project debt, among other key benefits.
“We have officially joined AFC and are now able to operate this new investment vehicle,” said HE Minister Mbaga Obiang Lima. “In Equatorial Guinea, we focus on three things: oil, gas and mining. Gas will be critical, as we already have the Gas Mega Hub initiative which transports additional stranded gas to our Punta Europa facilities. Our first phase was the very successful $400 million Alen Gas Monetization Project – completed during COVID-19 and ahead of schedule. We are currently in discussions with Cameroon and Nigeria on the possibility of bringing in additional gas.
Leveraging strong partnerships, an infrastructure-focused investment approach and expert knowledge in key priority areas, AFC has supported several innovative transition-focused projects, including Africa’s first carbon-neutral industrial zone – the billion-dollar Nkok Special Economic Zone. Zone in Gabon – in which it has invested 150 million dollars.
“Africa bears the least weight of [climate] crisis we are facing,” said AFC Senior Director Osam Iyahen. “In trying to eradicate this problem, our white paper highlights that there are other ways to approach the transition outside of the current discussion that focuses on reducing emissions for African countries.”
Emerging oil producer Niger discussed the role of cross-border infrastructure and regional financing mechanisms in West Africa, as well as the importance of safeguarding Africa’s hydrocarbon resources as part of the energy transition world.
“With regard to natural gas, Niger has a joint project with Algeria and Nigeria – the 4,000 km Trans-Saharan Gas Pipeline – which will bring Nigeria’s gas reserves to European markets,” said HE the Minister. Sani Mahamadou. “This project can be a game-changer for all parties involved. For Niger, it will facilitate access to energy for our population, which is currently less than 20%. If we want to improve energy security, we must use our resources. We cannot sit on it and advance the narrative and ambitions of others. Africa must speak with one voice when it comes to COP27 and must avoid going there divided.
AFC echoed the need for lending institutions to prioritize the financing and development of natural gas projects, as well as projects that help facilitate intra-African trade and create markets for processed products.
“Our strategy going forward targets projects that have high development impact, address the climate issue we face, and address gas monetization,” said Franklin Edochie, Senior Vice President, AFC. “We are looking to do that aggressively and look at gas-led transactions, in terms of monetizing reserves. Many of the mergers and acquisitions this year have quite a bit of gas in them.
