Financing Africa’s just transition [Gas in Transition]
Financing Africa’s just transition [Gas in Transition]
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Natural Gas News
Financing Africa’s just transition [Gas in Transition]
Summary
Financing Africa’s energy, oil and gas development requires significant investment and policy coordination, with risk management and insurance playing crucial roles. by: Charles Ellinas
The European Commission (EC) and the African Development Bank (AfDB) on January 29 formalised a new Financial Framework Partnership Agreement, aimed at expanding investments in infrastructure projects in Africa in strategic transport corridors, in energy and digital connectivity. This follows the success of African countries at COP28, where their key demands, for a just energy transition, climate change finance and funding for adaptation, received strong support. This was led by the African Group of Negotiators (AGN), which demanded the right for Africa to develop its oil and gas resources, particularly gas as a transition fuel, to enable African countries to industrialise and then reinvest gains in low-carbon energy projects. Africa’s population now exceeds 1.4bn people, and it is projected to reach 2.5bn by 2050. The continent has abundant natural resources, including minerals, oil and gas, that have become increasingly attractive to the rest of the world. But despite this, Africa is facing an energy crisis and severe energy poverty, with about 600mn people – over 40% of the population – lacking access to energy. The agreement with the EC, and another one between USAID and AfDB, extended last year to 2030, could help combat energy poverty in Africa. But their main thrust is to support clean energy projects. However, as the International Energy Agency (IEA) concluded l...
Related Knowledge Center: Climate economics
Climate change is now a driver of the world’s economy. The impact is profound:
- Catastrophic weather events — hurricanes, floods, droughts, high temperatures — are more frequent and more extreme. The cost can be measured in both the initial damage caused and the longer-term impact on the economy.
- Vulnerable communities are increasing climate-related investments, hardening infrastructure and taking other protective measures.
- Investment in carbon capture and storage technologies is increasingly rapidly.
- Governments are making investments and crafting regulations to reduce emissions of carbon dioxide and other greenhouse gases.
On top of all of this is the cost of uncertainty. As the Fourth National Climate Assessment, released in 2018 by the U.S. Global Change Research Program, says, “The assumption that current and future climate conditions will resemble the recent past is no longer valid.”