Africa’s energy transition must be African at heart and in practice

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Local content policies and localization strategies cannot be forgotten in the pursuit of investment and efficiency. By Verner Ayukegba.

AFTER such a long time dealing with the problems of the past, Africans can look to the future with the promise of a better life. After all, when it comes to natural resources such oil, gas, coal, diamonds, rare earths, woods, or agricultural potential and legacy-free technological development, there is no place like Africa. Over the last decade, most of the world’s biggest oil and gas discoveries took place on the African continent, and rapidly developing indigenous companies are ensuring these resources serve Africans and African economies more than they ever did before, resources that will power industries, light homes and create wealth.

Our time to rise is finally here

As the Africa Energy Chamber has advocated since its establishment, we are finally seeing petrochemical plants, fertilizer plants and gas-fired power plants popping up across the continent. An African natural gas economy is growing where before the plague of flaring stood unmatched.

Intra-African trade in both natural gas and Liquefied Natural Gas (LNG) is also likely to rise significantly, on the back of rapid urbanization and development across the continent which is set to increase energy consumption on the continent by more than 50% before 2040, This will speed up wealth creation and capacity building across borders.

The African energy transition will not be made in the West

The issue of climate change has come to dominate the global debate over the energy sector. An energy transition is necessary to tackle the effects of CO2 emissions on a planetary scale. While Africa has contributed only a miniscule part of those emissions, it stands to suffer the most from the effects of this change, and must as well prepare for a progressive shift in its energy structure. In many ways, the channelling of natural gas for power generation and the upgrading of oil and gas infrastructure and equipment to improve efficiencies and reduce the industry’s carbon footprint is already going a long way to achieve that. New renewable energy projects from Kenya to South Africa will also help balance out the continent’s energy matrix as it expands its electrification rates to reach every African in every corner of the continent.

Already, we see examples of gas-poor countries like South Africa investing in natural gas and LNG projects in gas rich Mozambique with the aim of reducing their growing energy deficit. As demand rises, exploration will accelerate and so will the use of the vast gas resources, including those that continue to be wasted through flaring. The African Continental Free Trade Zone is an ideal platform to promote the development of an intra-African natural gas trade that will promote widespread economic growth and access to power. Again, it is fundamental that these developments are pegged to well implemented and designed local content policies, so that Africans can truly benefit from the exploitation of their continent’s resources, and by so doing, ensure that Africa’s energy transition will be driven and made sustainable by those that will transition with it.

(Original content edited for length.)

Verner Ayukegba is the Senior Vice President with the African Energy Chamber and Director of Operations at DMWA Resources, a pan-African energy marketing & investment firm.