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Why do you need an African energy bank? Now (by NJ Ayuku)

NJA yuk, Chairman of the African Energy Chamber of Commerce ((((EnergyChamber.org).

The African Energy Chamber of Commerce has been opposed to steadily building pressure to stop new foreign investment in Africa’s oil and gas industry for over a year.

To prevent catastrophic climate change, environmental groups, financial institutions and governments in Europe and North America have announced that developing countries, including Africa, will produce and use fossil fuels as well as renewable energy sources such as the sun, wind and hydrogen. Insists that we must move to. .. As a reminder, the vast majority of people who make these demands are based on industrialized countries built on fossil fuels (oil and gas fueled economic engines), but in developing countries. Does not want to use fossil fuels for the same purpose. To make matters worse, the African countries that these groups are aiming for have abundant natural resources at their feet that they can use to supply reliable electricity, grow their economies and build a better future.

These are some of the reasons why Dr. Omar Farouk Ibrahim, Secretary-General of the African Petroleum Producers Union, correctly pointed out that it is a mistake for Africans to abandon their abundant oil resources. It is unwise to turn away from about 130 billion barrels of proven oil reserves and more than 15 trillion standard cubic meters of natural gas in pursuit of expensive and unreliable energy sources.

The African Energy Council has repeatedly stated that Africa still needs an oil and gas sector. He also sought to explain the important role played by international oil companies (IOCs), foreign governments and investment institutions in building an oil and gas sector that truly benefits Africans. For example, the IOC engages in knowledge sharing and provides Africans with the opportunity to acquire valuable work skills. In addition, foreign oil and gas investments generate revenue that can be used to build and improve both fossil fuel and renewable energy infrastructures. By supporting natural gas projects, investors will also pave the way for gas-to-electric projects that will help minimize widespread energy poverty on the continent.

In July 2021, when it became clear that reasoning had no consequences, the Chamber of Commerce went to the point of adopting the same tactics that the international community used for our members. Called for a boycott (https://bit.ly/3FTH7rb) For financial institutions that discriminated against the African oil and gas industry.

But the calls to stop lending to Africa’s oil and gas have become louder and more persistent. More recently, at the 2021 UN Climate Change Conference (COP26) in Glasgow, more than 20 countries and financial institutions have promised to stop public funding for fossil fuel projects abroad.

For those of us interested in the African oil and gas industry, it’s time to face the facts. We need to find a way to save it ourselves. The African Energy Council is calling on African states and the private sector to establish an energy bank focused on funding African energy projects. The idea is to create a source of funding for all kinds of African energy, independent of foreign aid, from oil and gas exploration to solar and hydrogen operations. We will no longer beg for assistance that would only be given on the condition that we give up fossil fuels.

We can do this, and we have to. Too many things are at stake. We cannot help but take advantage of recent discoveries such as light oil found off Angola, oil in the Kavango basin of Namibia, shale gas in the Karoo basin of South Africa, and oil and natural gas off the coast of Côte d’Ivoire. .. These are just a few of the key discoveries that occurred in 2021, each representing an important opportunity for everyday Africans.

Imminent needs demand decisive action

Africa’s desire to save the oil and gas industry is not based on the greed to make money for a small number of elites. We do not prioritize economic goals over people and climate. On the contrary, we are convinced that the use of oil and gas is the best way to meet some of the most pressing needs of people. And we believe that pursuing our oil and gas opportunities is not an environmental catastrophe, as some have suggested.

As OPEC Secretary-General Mohammed Sanushi Balkind said, Africa’s commitment to energy poverty is an urgent issue that must be prioritized over oil and gas abandonment. Balkind described the devastating effects of energy poverty during Africa Energy Week in Cape Town. (By the way, the meeting was held after the London-based Hyve Group / Africa Oil Week moved from Cape Town to Dubai. Imagine talking about African energy outside of Africa. It seems to be another example of the West downplaying the energy industry.)

“The unfortunate reality for developing countries is that an astonishing 759 million people around the world will not have access to electricity in 2019, about 79% of which will be in Africa,” Balkind said. increase. “In addition, about 2.6 billion people, or 34% of the world’s population, did not have access to clean cooking fuels and technologies, including 70% of inaccessible Africans, and high-level households. Exposed to the air. Contamination.

“The number of energy poverty in Africa is very severe. To add one more thing, Africa accounts for only about 3% of the world’s emissions.”

As Senegal’s Chairman Macky Sall, Chairman of the African Union, said, African countries are open to accepting renewable energy sources. time table.

“Our country cannot achieve an energy shift and abandon pollution patterns in industrialized countries without a viable, fair and equitable alternative,” Sall said. “Our country, which already bears the overwhelming burden of unequal trade, cannot bear the burden of unfair energy conversion.”

President Saul is right. South African President Cyril Ramaphosa is also correct. “We must address not only these major dangers (of climate change), but also the potential economic and social damage if global society fails to cope with the crisis. Developing and developed markets. In a way that works with. “

Developing an African energy bank is a way to protect our country from these social and economic dangers. China has the potential to become a trusted partner in Africa in building these unique financial infrastructures.

I can do it

You may be wondering if the African Energy Bank is a realistic goal. How can a continent struggling to save many from poverty to raise money for energy projects? I believe it can be done. In the first place, the African government can secure a portion of its oil and gas revenues to finance new projects. In our report, Africa Energy Outlook 2021, the African Energy Chamber predicts that 2021 revenues from African government loyalty, profit oil, and other taxes will reach US $ 100 billion. Even 5% of that amount creates $ 50 million for exploration, development, or infrastructure.

You can also raise money by investing an African pension fund in an African energy project. According to Cape Town-based investment firm Ris Cura, the local pension fund manages approximately US $ 350 billion in assets in sub-Saharan Africa and is actively looking for new investments. Would you like to encourage us to add oil, gas and renewable energy projects to our list? Investing pensions in the energy sector is hardly a new practice. Some of America’s largest pension funds are invested in fossil fuel producers, and pension funds around the world are investing in green energy projects. This is not a free gift. Investing in fossil fuels, especially gas projects and developing marginal areas, will result in a large return on investment. And millions of Africans will participate in our growth and future.

That’s not the only funding option. We also need to seek the support of wealthy Africans who want to invest in a better African future. As of December 2020, Africa’s total private wealth was approximately US $ 2 trillion. It doesn’t even include the African diaspora. Imagine what you can do if you unite.

Not only is there a way to raise money, but there are also examples of the types of banks that Africa needs to fund its own energy projects. This dates back decades. I’m talking about the African Export-Import Bank. In 1993, the African Government worked with public and private investors to establish banks to fund, promote and expand trade within and outside Africa. They succeeded. In 2020, the African Continental Free Trade Agreement (AfCFTA) was awarded the African-America Institute (AAI) Institutional Institution of Excellence Award for its commitment to the creation and implementation of the African Continental Free Trade Agreement (AfCFTA) and its continued commitment to investing in education. I won the award. AAI paid more than $ 30 billion to support African trade in Africa alone between 2015 and 2019. This includes over $ 15 billion to finance and promote intra-African trade.

By the way, Afrieximbank recognizes the importance of protecting Africa’s oil and gas industry.

“From a banking perspective, Africa produces less than 4% of greenhouse gases. We are not a greenhouse gas issue. We are victims. We are looking for balance.” Said Benedict Orama, Chairman and Chairman of the African Export-Import Bank.

In other words, let’s build on the model of Afrieximbank. Not only that, let’s grow a pool of investors who understand and understand the importance of oil and gas to Africa. Foreign and corporate capital is always welcome, unless the timeline assumes that fossil fuels will be phased out. If they are in a hurry to renewable energy, they will not be part of our solution.

With the support of one or more African energy banks, local oil and gas companies can get the money they need to acquire their assets. They will build oil and gas pipelines across Africa, power Africa, minimize energy poverty and promote the use of natural gas (including liquefied natural gas) to drive industrialization. Raise funds to do so.

And African states and entrepreneurs can fund the development of renewable energy businesses, especially blue, green and gray hydrogen businesses that create additional opportunities for Africans. Africa already has new green hydrogen operations in Mali, Namibia, Gambia, Senegal, Mauritania, Niger and South Africa, with the potential to become a major green hydrogen exporter with adequate funding.

The African Energy Chamber of Commerce will support the Energy Bank initiative and work to attract potential participants. Establishing a unique institution to fund energy projects will give the market a clear signal that Africans are trying to become leaders in the expansion of private capital. It shows that it is driving natural gas development and infrastructure while supporting low carbon investment.

Once funded, African companies can not only produce oil and gas, but also support community development, open up green energy markets and create jobs.

This funding will allow African companies to upgrade their refineries during Africa’s Energy Week by Anibor Kragha, Secretary-General of the African Refiners and Distributors Association, to address urgent needs. , Will be able to produce cleaner fuel.

For many African countries, the oil and gas industry is the best way to provide millions of Africans with the kind of work, living standards and stability that developed countries have enjoyed for over a century. .. We must adhere to those goals and do what is necessary to achieve them.

Distributed by the APO Group on behalf of the African Energy Chamber of Commerce.

Why do you need an African energy bank? Now (by NJ Ayuku)

Source link Why do you need an African energy bank? Now (by NJ Ayuku)

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