Reverse decision halting fossil fuels funding, AEC tells financiers

Africa Energy Chamber (AEC) has asked multilateral financial institutions and other global financial bodies to immediately reverse the decision on halting funding for fossil fuels, stressing that the energy crisis has placed the world, especially Africa on the verge of serious crisis.

Speaking on the sideline of the 2023 African Refiners and Distributor Association (ARDA) Week in Cape Town, Executive Chairman of AEC, NJ Ayuk said financial institutions, including commercial banks in Africa and the African Development Bank are unjust in their apathy for fossil fuel.

Ayuk said that over 600 million people without access to electricity and 900 million without access to clean cooking technologies are more worried about energy access and security than energy transition.

“They need to reverse their decision on halting funding of fossil fuels across Africa. It is unjust for African countries to be the target. We are only a victim to their greenhouse gas emissions. We should not be paying reparations to wealthy countries or to Europe on where we stand.

“Europe decided last year that gas is green for them but it is not green for Africa. When the crisis started, they had to come back to Africa and take every piece of gas to power Europe during the winter, and then Africans were left in the dark. That is unfair. That is not just transitioned. The European Investment Bank, Royal Bank of Scotland and financial institutions need to stop the blockage of financing on African gas projects,” Ayuk said.

According to him, there’s much gas in Africa requiring funding to be developed for the industrialisation of the continent.
Ayuk said most decisions on energy transition are discriminatory and restrict Africa as they are not in the best interest of getting people out of poverty.

Ayuk lambasted African Development Bank and commercial banks on the continent for also walking in the direction of foreign financial institutions, stressing that the banks need to reverse that.

“You can’t have an African bank that says we are not going to invest in oil and gas because the majority of their shareholders are from the West. African commercial banks are bowing to the pressure because of strong international financing. We need to reverse that and really deal with energy security issues today. That’s what Europe did when they had a crisis. When Europe is in a recession. Africa is in depression. We need to turn around depression and get back,” he said.

Ayuk said the priority for Africa is energy security at a time when the majority of Africans are going eight to 10 hours a day in blackouts.

While noting that Africa only contributes 2.7 per cent of greenhouse gas emission, Ayuk said the continent cannot follow the same path as the wealthy nations on the issue of transitions.

While the continent is looking elsewhere for funding, Ayuk noted that Africa should no longer wait for grants and aid as the $800 billion aid received by the continent in the last 30 years did not yield results.

With the African economy today standing at $2.6 trillion, Ayuk said the countries must galvanize funding around Africa to help itself.

“You are not going to get to Europe or America. If you aim to solve these problems, it hasn’t been an African solution. It has to be an African driver. And that’s why we need to open up the system. We need to create opportunities for African hedge funds, African private equity.

He urged the continent to address ease of doing business barriers where it takes so long to set up a company and issues on transparency, mismanagement, corruption, visa challenges to go from one African country to another.

Ayuk stated that must not see itself as victim, hoping that Europe would everything but instead the continent must innovate locally made solutions that would address the prevailing challenges.

He urged wealthy Africans to put their money into developing the continent instead of sending it to Swiss banks or to Europe to develop other continents.