Anibor Kragha of ARDA recommends Africa develop a sustainable finance plan to execute unique, robust Energy Transition Process

Finance and energy expert, Anibor Kragha of ARDA  have said there are options that might enable Africa to finance oil and gas projects despite campaign against fossil fuels.

The experts also emphasized the need to focus on cleaner, harmonised fuel specifications as well as environment, social and governance (ESG) considerations to reduce the looming public health and environmental impacts on Africa’s citizens while boosting cross-border trade of petroleum products under the implementation of the African Continental Trade Agreement (AfCFTA).

The African Refiner and Distributor Association (ARDA), which brought the stakeholders together at a virtual sustainable financing workshop, noted that moving Africa away from cooking with firewood and charcoal to modern fuels would cost the continent about $7.5 billion.

From now till 2030, the group noted that the $7.5 billion investment, inclusive of debt, equity and grants, would be required to build clean cooking stoves and downstream infrastructure that would support the attainment of the UN Sustainable Development Goals (SDGs).

The Association had earlier disclosed that African refineries would need about $15.7 billion (+/-50 per cent) to upgrade their facilities to produce cleaner fuels.

Executive Secretary of ARDA, Anibor Kragha, stated during the workshop that with the growing pressure against fossil fuels, African countries must deploy measures to secure the needed financing to develop and add value to our hydrocarbon resources as these actions are fundamental for the continent’s industrial development and overall energy security.

Last month, International Energy Agency insisted that achieving net-zero emissions by 2050 would require complete transformation of the global energy system and called for a total halt of investments for upstream oil development.

Against this backdrop, Kragha recommended that the continent develops a sustainable finance plan for Africa that will be used to execute a unique, robust African Energy Transition Plan.

Director & Global Head Client Relations, Afreximbank, Rene Awambeng stated that climate change reduces the GDP of African countries by 1.5 per cent per year and the bank has a robust Climate Financing Strategy to bridge the climate finance gap.

Awambeng also noted that the bank also would be committed to funding cleaner fossil fuel projects as part of the overall energy transition programme for Africa, adding that there several strategic partnerships with various development, including European Investment Bank and others to fund projects that would ultimately enable a low carbon future for Africa.

Business Development Experts for Vitol Services Ltd, Richard Egan and Guillaume Quigiver, shared case studies of flare reduction projects in Nigeria and the United Arab Emirates and noted that Environment, Social and Governance (ESG) pressures create a new opportunity for African countries to generate carbon credits.

According to Egan, Africa has the lowest cost of generating carbon credits in the world and as such a case should be made for a framework whereby African carbon emissions submissions are accepted in the global marketplace. “ESG brings new potential revenue streams that can be incorporated into a financing package.”