Africa Energy Forum

By Greg Nott – Head of the Africa Practice at Norton Rose Fulbright and specializes in energy deals

I was honored to attend the recent Africa Energy Forum in June in Nairobi, Kenya. Our delegation enjoyed witnessing first-hand those shaping Africa’s energy policies, such as Honourable Davis Chir Chir, Kenyan Cabinet Secretary for Energy & Petroleum; Dr. Sultan Ahmed Al Jaber, the UAE’s Special Envoy for Climate Change & COP28 President Delegate and Nobuhle Nkabane, Deputy Minister for the Department of Mineral Resources & Energy in South Africa as well as energy ministers and envoys from Nigeria, Ethiopia, Senegal, Uganda and many more.

The event united governments, utilities, and regulators with development finance institutions, commercial banks, power developers, technology providers, and professional services. The Forum has been going for 24 years and has a reputation for being the most important gathering of decision-makers in African energy. Attended by the most credible organizations in the African energy sector, the Forum facilitated partnerships and identify opportunities to move the industry forward while tackling the continent’s biggest energy obstacles and postulating solutions and remedies.

Although the lights have been out (or not so much this winter!) at home in South Africa, there was much to be excited about regarding Africa’s energy future, with other African nations emerging from behind our shadow to take more of a leading role.

Kenya has an energy mix that boasts 94% renewable energy and is strong in geothermal, wind energy, and hydro. One benefit of their economy not being built on fossil fuels is that their goal of carbon neutrality by 2030 may be attainable. Honorable Chir Chir highlighted their drive to lower the energy cost in Kenya to attract global funds and finance partners to choose Kenya as a regional base, which will assist in growing their economy and creating jobs. Currently, only 35% of their population has access to electricity, so this is a development focus area.

Kenya’s 2019 Energy Act which will go before Parliament has new regulations to bring in private investors and partnerships for the development of transmission lines that will transmit power to the load centers and reduce the burden on the Kenya Electricity Transmission Company (Ketraco).

Kenya is leading the way for other African nations, who are also examining how to sustainably harness their existing resources to match the increasing demand for energy needed for economic development and to tackle poverty—at the same time, following a sustainable path to a net-zero future. For Africa, the question is not how to reduce the carbon footprint because the continent’s overall contribution to global GHG emissions is already less than 4 percent.

Another critical part of the discussions was climate financing for Africa. The African Development Bank (AfDB) president, Akinwumi Adesina, stated that Africa is being short-changed at the World Bank meetings in May. “Anywhere you look in Africa today, climate change is causing havoc…Hotter temperatures are drying up limited water, causing water stress for crops and livestock and worsening food insecurity.” Delegates agreed that speaking collectively as a continent is critical for Africa’s voice on the international stage.

Private sector climate financing for Africa needs to increase by 36% annually, and according to AfDB estimates, Africa will require $2.7tn by 2030 to finance its climate change response.

According to Dr. Sultan Ahmed Al Jaber, the UAE’s Special Envoy for Climate Change & COP28 President Delegate, if African nations had accessible and affordable financing, the UN Sustainable Development Goals would be within reach. He will make this a focus of his COP28 presidency and is working with all partners to make progress to unlock affordable and sustainable funding.

Like South Africa’s Just Energy Transition (JET) plan supported by US and European government and private partners, JETPs are G7-led initiatives that use a mix of public and private funding to help developing economies shift from coal to a greener energy mix while also allowing them to address the social impacts of the change.

However, as we’ve seen in South Africa’s case, it is a process fraught with complexities, and some African nations may look to developing their plans alongside G-7 initiatives to shift away from coal for energy supply while protecting the incomes and jobs of their powerful coal-related industries. This shift is due to underfunding and undelivered promises of international pledges for development climate financing.

Several African countries are looking towards green hydrogen technology, which the event unpacked in compelling expert presentations. Hydrogen, like electricity, is an energy carrier but is also a feedstock. It can transport power much more cheaply than electricity transport (FACT CHECK). With green hydrogen technology, Africa can accelerate access to electricity for millions by ensuring renewable energy resources are accessible while meeting global climate guidelines.

In 2021, Namibia announced an estimated $9.4 billion green hydrogen project, scheduled to kick off in 2026. The target is to generate 2 gigawatts of renewable electricity for regional and global markets.

Egypt is another African nation staking its claim in developing green hydrogen. The North African country faces serious climate change issues such as water scarcity, droughts, and rising sea levels, and its government is mobilizing funds to ensure a green energy transition. A major part of their strategy involves tapping the Sovereign Fund of Egypt to facilitate private sector investment in green technologies.

Cairo sees green hydrogen as critical to North Africa’s green transition and a lucrative economic opportunity. North Africa has vast untapped renewable resources.

In February 2022, South Africa announced plans to support a pipeline of green hydrogen projects worth billions over the next decade. Kenya, Morocco, and Nigeria are also at various stages of developing strategies to integrate green hydrogen into their energy mixes.

Even though Africa has been on the back foot in previous decades due to its lack of energy access for its population, there is a global race to develop green hydrogen, and many African nations are already at the starting blocks with developed countries. It’s an exciting space to watch, the work has begun, and the promise is that green hydrogen could draw billions of investments into the continent.