The race to limit the potentially catastrophic effects of climate change was given a major boost in December last year after governments committed to transition their economies away from fossil fuels at the COP28 climate summit1. But for countries where access to reliable energy sources is an acute challenge, and carbon dioxide emissions in many cases are negligeable — Africa contributes just 3.8% of global emissions versus China’s 23%2 — oil and gas exploration and development remain key to driving social and economic progress. Reconciling the move towards greening global energy systems with the need for African countries to develop and finance their own resources is a challenge.
Oil and Gas Discoveries and Developmental Benefits
Recent discoveries of oil and gas reserves in countries like Mozambique, Senegal, and Tanzania present opportunities for economic benefits and wider energy access. Mozambique’s 2022 production of some five billion cubic meters of natural gas is expected to have doubled in 2023 as new LNG plants are developed3. Likewise, in Senegal the Greater Tortue Ahmeyim (GTA) field (shared with Mauritania) is expected to supply 2.5 million tons of liquefied natural gas (LNG) per year at its peak, while at its most productive, the Sangomar project is anticipated to provide 100,000 barrels per day4. Strategists at BMI Research predict that, as a result, growth in Senegal will rocket to 9% this year, the highest in the country’s post-independence history as it begins to export large amounts of oil and gas5.
However, the journey towards energy sufficiency is fraught with obstacles. Despite commendable strides in expanding access to electricity and clean cooking, universal access remains an elusive goal across much of Sub-Saharan Africa. Less than half of the people in Mozambique and Tanzania have access to electricity and less than 10% have access to clean cooking options6. In Senegal, while three-quarters of the population have access to electricity, just over 25% have access to clean cooking, the IEA says7. Even resource-rich nations like Nigeria, the continent's largest oil and gas producer, grapple with pervasive energy poverty, highlighting the limitations of hydrocarbon wealth in addressing energy access challenges8.
Oil and Gas Discoveries and Developmental Benefits
Recent discoveries of oil and gas reserves in countries like Mozambique, Senegal, and Tanzania present opportunities for economic benefits and wider energy access. Mozambique’s 2022 production of some five billion cubic meters of natural gas is expected to have doubled in 2023 as new LNG plants are developed3. Likewise, in Senegal the Greater Tortue Ahmeyim (GTA) field (shared with Mauritania) is expected to supply 2.5 million tons of liquefied natural gas (LNG) per year at its peak, while at its most productive, the Sangomar project is anticipated to provide 100,000 barrels per day4. Strategists at BMI Research predict that, as a result, growth in Senegal will rocket to 9% this year, the highest in the country’s post-independence history as it begins to export large amounts of oil and gas5.
However, the journey towards energy sufficiency is fraught with obstacles. Despite commendable strides in expanding access to electricity and clean cooking, universal access remains an elusive goal across much of Sub-Saharan Africa. Less than half of the people in Mozambique and Tanzania have access to electricity and less than 10% have access to clean cooking options6. In Senegal, while three-quarters of the population have access to electricity, just over 25% have access to clean cooking, the IEA says7. Even resource-rich nations like Nigeria, the continent's largest oil and gas producer, grapple with pervasive energy poverty, highlighting the limitations of hydrocarbon wealth in addressing energy access challenges8.
Funding Difficulties
A significant hurdle lies in securing financial support for energy projects. Commitments by governments, financiers, and businesses, largely in the Global North, to reduce the amount of hydrocarbon extraction they finance or develop, is making it more challenging for countries like Senegal to secure the funding to develop their resources.
Multilateral development banks face pressure to align with climate goals, creating tensions with African states seeking to develop their hydrocarbon resources. In 2017, the World Bank announced it would stop financing upstream oil and gas projects while the European Investment Bank (EIB) followed suit in 2019, committing to end financing for fossil fuel energy projects from the end of 20219. Commercial bank funding is also becoming increasingly difficult to secure with the likes of HSBC10 and JP Morgan11 pledging to reduce their funding to the sector. This tension underscores the need to strike a balance between climate objectives and the imperatives of poverty alleviation and economic development.
Though more limited in its options, Senegal was able to secure financing for the projects from joint-venture partners Woodside, BP, and Kosmos Energy. However, despite agreeing to wide-ranging cooperation encompassing the GTA project and other potential energy developments with the Government of Senegal12, BP is understood to be trying to exit Yakaar-Teranga, another offshore gas discovery which it set out to develop in 201713.
The lack of support for energy projects is proving problematic for many emerging countries rich in fossil fuels, according to publication Global Capital, which cites tension between African states that want to develop hydrocarbons and unwilling multilateral development banks14. Adama Coulibaly, the Minister of Finance and Budget for Côte d’Ivoire, rightly emphasizes the need to address poverty and development challenges alongside climate imperatives15.
The disproportionate burden placed on African nations — whose carbon emissions pale in comparison to global behemoths — underscores the inherent unfairness of current climate financing paradigms. If Africa were to triple its production of natural gas from current levels, its contribution to global emissions would only rise by 0.67%, African Development Bank President Akinwumi Adesina said in 202216.
Efforts are being made to expand access to clean electricity in Sub-Saharan Africa. The European Union and its partners signed a joint declaration with Senegal in June 2023 to achieve universal access to energy and assist the country’s transition to a low-carbon, sustainable energy system. The Just Energy Transition Partnership (JETP) also aims to increase the share of renewable energy to 40% of Senegal’s electricity mix by 203017. On a smaller scale, projects like solar powered street lights in Ethiopia18 and electric buses in Kenya18 are working to expand the use of clean electricity in other parts of the continent.
Funding Difficulties
A significant hurdle lies in securing financial support for energy projects. Commitments by governments, financiers, and businesses, largely in the Global North, to reduce the amount of hydrocarbon extraction they finance or develop, is making it more challenging for countries like Senegal to secure the funding to develop their resources.
Multilateral development banks face pressure to align with climate goals, creating tensions with African states seeking to develop their hydrocarbon resources. In 2017, the World Bank announced it would stop financing upstream oil and gas projects while the European Investment Bank (EIB) followed suit in 2019, committing to end financing for fossil fuel energy projects from the end of 20219. Commercial bank funding is also becoming increasingly difficult to secure with the likes of HSBC10 and JP Morgan11 pledging to reduce their funding to the sector. This tension underscores the need to strike a balance between climate objectives and the imperatives of poverty alleviation and economic development.
Though more limited in its options, Senegal was able to secure financing for the projects from joint-venture partners Woodside, BP, and Kosmos Energy. However, despite agreeing to wide-ranging cooperation encompassing the GTA project and other potential energy developments with the Government of Senegal12, BP is understood to be trying to exit Yakaar-Teranga, another offshore gas discovery which it set out to develop in 201713.
The lack of support for energy projects is proving problematic for many emerging countries rich in fossil fuels, according to publication Global Capital, which cites tension between African states that want to develop hydrocarbons and unwilling multilateral development banks14. Adama Coulibaly, the Minister of Finance and Budget for Côte d’Ivoire, rightly emphasizes the need to address poverty and development challenges alongside climate imperatives15.
The disproportionate burden placed on African nations — whose carbon emissions pale in comparison to global behemoths — underscores the inherent unfairness of current climate financing paradigms. If Africa were to triple its production of natural gas from current levels, its contribution to global emissions would only rise by 0.67%, African Development Bank President Akinwumi Adesina said in 202216.
Efforts are being made to expand access to clean electricity in Sub-Saharan Africa. The European Union and its partners signed a joint declaration with Senegal in June 2023 to achieve universal access to energy and assist the country’s transition to a low-carbon, sustainable energy system. The Just Energy Transition Partnership (JETP) also aims to increase the share of renewable energy to 40% of Senegal’s electricity mix by 203017. On a smaller scale, projects like solar powered street lights in Ethiopia18 and electric buses in Kenya19 are working to expand the use of clean electricity in other parts of the continent.
African Gas Projects in Development
GW of oil and gas plants in development
mtpa LNG terminalcapacity in development
Km of gas pipelinesin development
Gas extraction areas in development
African Gas Projects
in Development
GW of oil and gas plants in development
mtpa LNG terminalcapacity in development
Km of gas pipelinesin development
Gas extraction areasin development
While the narrative of transitioning to renewable energy is appealing, the reality is nuanced. Hydrocarbon extraction remains integral to the developmental trajectory of many African nations. It is crucial that policies and financing mechanisms strike a balance between decarbonization goals and developmental needs, ensuring a transition that is fair, inclusive, and conducive to shared prosperity.
In conclusion, navigating the energy transition in Africa demands a pragmatic and equitable approach. African nations, endowed with abundant energy resources, deserve support as they navigate the complexities of sustainable energy transitions. It is imperative that global efforts prioritize fairness and inclusivity to foster a transition that benefits all stakeholders.
While the narrative of transitioning to renewable energy is appealing, the reality is nuanced. Hydrocarbon extraction remains integral to the developmental trajectory of many African nations. It is crucial that policies and financing mechanisms strike a balance between decarbonization goals and developmental needs, ensuring a transition that is fair, inclusive, and conducive to shared prosperity.
In conclusion, navigating the energy transition in Africa demands a pragmatic and equitable approach. African nations, endowed with abundant energy resources, deserve support as they navigate the complexities of sustainable energy transitions. It is imperative that global efforts prioritize fairness and inclusivity to foster a transition that benefits all stakeholders.
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