Funding sacrosanct as Africa’s energy demand may rise by 50%
African countries may face daunting challenges in meeting their energy needs as growing populations may push demand to over 50 per cent.
Agitations against financial institutions, including African lending bodies to halt support for fossil fuels may also worsen the prevailing energy crisis on the continent, the African Refiner and Distribution Association (ARDA) has said.
ARDA told Energy Intelligence investment in clean transportation and cooking energy to reduce carbon emissions may remain a mirage if agitations persist.
While global bodies are already calling investors to drop funding for fossil fuel projects, protesters are already forcing Africa’s Standard Chartered bank which had moved to back African countries in harnessing hydrocarbon resources.
The take for most African energy stakeholders, including ARDA, African Energy Chamber and the Nigerian National Petroleum Corporation Limited was that African would need to continue the exploration of existing resources while industrialising and gradually adopting cleaner energy.
The view that halting investment in fossil fuel could trigger an exponential increase in energy price is also gaining ground as some European energy experts last week believed that oil price could hit $380 per barrel.
Executive Secretary, ARDA, Anibor Kragha, described the energy sector in Africa as being in a “crisis of funding.”
Kragha, who told Energy Intelligence that initiatives to reduce pollution from petroleum-based fuels in Africa are under threat, noted that freezing funding of oil and gas projects won’t be the best.
To him, Africa’s energy requirements will rise by 45 to 50 per cent over the next two decades, pegging his prediction on the growing population.
He had earlier told The Guardian that a decade-by-decade Sustainable Finance Plan would be required to ensure investments are made to deliver a unique African Energy Transition Plan.
Kragha said digitalisation, machine learning, decarbonisation, safety and reliability, efficiency and funding were key to refineries of the future in Africa.
Kragha also stated that separate frameworks are required to promote cleaner transport and cooking fuels, lower-carbon power generation and renewables.
ARDA had previously stated that about $15.7 billion (+/-50%) would be needed to upgrade the existing 36 refineries on the continent. The challenge will be to ensure that these refineries are converted into efficient centres of excellence wherein the latest technology is used to deliver cleaner, higher-value products while significantly reducing emissions. In addition, a further $7.5 billion has been estimated by the Shell Foundation as the requirement to displace charcoal with modern cooking fuels across Africa.
Kragha said, “Complex, inefficient supply chains and intra-African trade challenges are currently impeding the implementation of cost-effective clean energy solutions, but the African Continental Free Trade Agreement (AFCFTA) presents an opportunity for the African Union and the respective Regional Economic Commissions to implement a harmonized Energy Transition Plan.”