Green propaganda, based on unfounded fears of climate doomsday, is beginning to threaten Africa’s ambition for developing a reliable and affordable energy sector. Christians concerned about the world’s poor should take notice.
Almost all African countries signed the Paris climate agreement. Now, in addition to the setbacks incurred due to climate pledges at Paris, the continent is facing a fresh wave of anti–fossil fuel policies and demands from international institutions.
For the people of Africa, this could be lethal. Abundant, affordable, reliable energy is indispensable to whole societies’ rising and staying out of poverty, and fossil fuels are the most affordable, feasible source for that energy.
Here’s a look at the funding crunch and the avenues still available for Africa to boost its energy sector.
Africa’s Way Out of Poverty: Fossil Fuel–Powered Economy
One-fifth of the world’s population lives in Africa, but the continent accounts for less than one twenty-fifth of global electricity use. Around 600 million in Africa have no electricity.
This lack of energy access means that the countries in Africa not only lack the means for economic progress but also are at a disadvantage in various aspects of everyday life. For example, 60 percent of health center facilities in 27 Sub-Saharan countries lack reliable electricity, making it difficult to respond to health emergencies. Simple light for students to read by to do homework at night — important to their developing skills for the marketplace — is a luxury few enjoy.
Despite ongoing efforts to improve this situation, it is estimated that around 530 million people will still lack access to electricity by 2030. The only way to solve this is through aggressively implementing fossil fuel projects across Africa and imports of fossil fuels to some of the poorest nations.
Why fossil fuels? Because the renewables favored by the climate change lobby cannot provide reliable, affordable electricity. A testament to this is Africa’s largest wind energy project, in Kenya. Kenya Power, the utility that runs it, is now in $1 billion of debt, as the intermittent energy from wind, hydroelectric, and geothermal sources resulted in increased operational cost.
So fossil fuel is the way forward. However, Africa faces unprecedented challenges from European and international entities determined to stop fossil use in Africa.
Banks and Leaders Embrace Green Ideology, Funding in Peril
The biggest setback to Africa’s fossil ambitions came from the major banking institutions and other big funding entities, which have decided to stop funding for fossil fuel projects internationally.
Among them is the African Development Bank (AfDB), a key channel of funding for infrastructure and developmental projects in African countries. AfDB has announced that it won’t fund fossil fuel projects in Africa.
AfDB kept to its promise in 2020 when its funding announcement was void of any direct funding for fossil fuels. Instead, AfDB gave around $552 million for renewable energy projects and other less reliable energy sources.
United Kingdom prime minister Boris Johnson said the U.K. would end financing for coal and oil projects abroad, including those in Africa. This would severely impact both ongoing and new energy projects in Africa.
For example, last year alone, the U.K.’s Export Finance (UKEF) released $1.15 billion to a liquefied natural gas (LNG) project in Mozambique. The project will make poverty-stricken Mozambique into a key LNG player by 2024, eventually improving its economy and uplifting the livelihoods of thousands the country.
UKEF also plans to fund eight more oil and gas projects globally. But with Boris Johnson’s proposed ban on fossil funding, key projects like these would no longer be possible in some of Africa’s poorest nations, and UKEF’s investment in Mozambique could be the last of its kind.
Calls for freezing fossil fuel funding have also come from United States president Joe Biden, French president Emmanuel Macron, and other key leaders from developed countries. It’s hard to avoid the impression that these are rich leaders telling the world’s poorest people, “You can’t climb out of poverty the way we did.” Sadly, what that means, if it sticks, is that they can’t climb out of poverty at all.
Some Channels Still Offer Hope
Despite the sudden exhausting of funding mechanisms, there is some hope for Africa as investments for fossil fuels continue to trickle in.
South Africa’s Standard Bank, for example, refused to stop its funding for coal mining, citing the practical reality of the coal-dominated energy sector. Defending its decision to continue funding, Kenny Fihla, chief executive of Standard Bank Corporate and Investment Banking, said, “If we were to stop completely to fund any coal mining related activity, we could as well say we are stopping 80% of Africa’s electricity generation and we do not think that would be a responsible thing to do.”
Even as oil giants like BP, Shell, Total, and Equinor begin to invest more in renewable energy, oil giant Exxon is forging ahead with its oil plans. Exxon, which is involved in numerous upstream oil projects on the eastern and western coasts of Africa, intends to increase its global fossil fuel output by one third in the next four years. Exxon’s vision will likely benefit the African nations with increased export revenue and also meet domestic energy needs.
China, in contrast to the U.S., U.K., and European Union, is already funding seven coal plants in Africa and plans to finance thirteen more. It is estimated that power output from Chinese-backed coal plants is likely to increase by three times by 2060. Besides, China is also involved in oil exploration and production in a number of countries. India, too, has invested in upstream and downstream oil projects in Africa.
With help from these and other new channels, Africa could neutralize the setbacks in fossil fuel funding from elsewhere. In fact, a new Oxford study has revealed that “fossil fuels such as coal and gas will continue to account for up to two thirds of the continent’s electricity generation beyond 2030.”
These existing channels for fossil fuel funding could provide a lifeline for Africa, but they are not sufficient. Energy experts believe Africa will not be able to achieve even basic development goals if fossil fuel funding dries up.
Murefu Barasa, managing director at EED Advisory, says, “There’s a lot of pressure from development agencies to say something like ‘no more fossil fuel projects,’ but that’s a horrible and sad way of thinking about the problem. Countries need the autonomy to develop their own least-cost power plans, especially before they attain universal access. Babies die in blackouts. So, the tradeoff of connecting the millions of people who don’t have power, versus doubling emissions, is well worthwhile.”
Vijaya Ramachandran, an economist who has worked at World Bank and the Executive Office of the secretary-general of the United Nations, says, “Blanket bans on fossil-fuel funds will entrench poverty.”
Ramachandran points out that “a higher-emissions Africa will be more resilient to the impacts of climate change. People with better access to education, health care, and housing are able to cope better with heat waves and typhoons. Roads, hospitals, resilient power grids, early-warning systems, robust food supplies, and other features of modernity buffet societies against natural disasters and other climate risks, even if the energy needed comes partially from fossil fuels. Keeping Africa poor to fight climate change will do nothing to help the people most affected by it.”
The decision to stop fossil fuel funding does not help Africa. It hurts it. Africa’s poor are likely to suffer more and remain in acute poverty longer if fossil fuel investments do not accelerate in the next decade.
Fossil fuels are a must for the growth of agriculture and industry in Africa. The U.S., the United Nations, the European Union, and the members of the G20 countries must reconsider their decision to ban fossil fuel funding. Funding institutions must begin to issue loans for fossil fuel projects if they want to witness visible improvement in the livelihood of people in Africa.
