In a recent development for Africa’s clean cooking landscape, the Global LPG Partnership (GLPGP) and the African Refiners&Distributors Association (ARDA) announced a $1.5 billion fund dedicated to supporting clean cooking initiatives across the continent. The fund aims to accelerate the adoption of LPG as a primary cooking fuel, addressing the urgent need to reduce the reliance on biomass, which remains prevalent across Africa. The GLPGP-ARDA fund will provide financing for infrastructure development, distribution networks and consumer education programs, facilitating broader access to LPG and promoting sustainable cooking practices.

This development comes at a time as African Energy Week (AEW): Invest in African Energy 2024 – scheduled for November 4-8 in Cape Town – prepares to host a session titled, Towards the Elimination of Energy Poverty: LPG Value Chains for the African Clean Cooking Crusade. With approximately 900 million people in Africa still lacking access to clean cooking technologies, the session will explore how investments in LPG and distribution can catalyze energy security in Africa. The session will also provide an overview of innovative financing tools applicable to LPG markets, with insights from industry experts including Spark+ Africa Fund’s Partner and Investment Director Peter George; LPG Association of South Africa’s (LPGSA) Managing Director Gadibolae Dihlabi; and Oryx Energies’ Managing Director Pam Indurjeeth.

AEW: Invest in African Energy is the platform of choice for project operators, financiers, technology providers and government, and has emerged as the official place to sign deals in African energy. Visit www.AECWeek.com for more information about this exciting event.

LPG serves as a vital solution for improving access to clean, affordable and reliable energy in Africa, and recent advancements across the continent aim to bolster the penetration of LPG in domestic markets. The International Energy Agency – which declared 2024 as the year for achieving universal access to clean cooking – mobilized $2.2 billion in public and private sector funding during a summit in Paris this year. The financing supports the adoption of clean cooking solutions such as LPG and accounts for half of the continent’s financial needs to achieve universal access.

In Gabon, independent oil and gas company Perenco launched its Batanga LPG plant in December 2023, representing the second phase of its $50-million gas development project – set to produce 15,000 tons of LPG. Similarly, Kenya has positioned itself as a regional LPG hub with the inauguration of a new facility in Mombasa. Notably, LNG distributor Taifa Gas began constructing a $130-million, 30,000-metric-ton LPG storage facility in the Dongo Kundu Special Economic Zone in Mombasa last December. This facility is set to reduce East Africa’s dependency on imported LPG, ensuring a more reliable and affordable supply for households.

In North Africa, Algeria – the continent’s largest LPG producer –  has advanced its LPG capabilities through a $740-million contract between national oil company Sonatrach and multinational TotalEnergies for extraction operations at the Tin Fouye-Tabankort fields. Similarly, Egypt, Africa’s third-largest LPG producer, is enhancing its infrastructure with the development of the $732-million Western Gas Complex. Scheduled to become operational later this year, this facility will significantly increase Egypt’s LPG production capacity to address the country’s growing energy needs.

In addition to energy access, progress is being made to boost capacity building across the LPG industry. Nigeria and Saudi Arabia have partnered to enhance LPG accessibility through the National Human Capacity Training Program for the Adoption of LPG. This initiative, led by Saudi Arabia’s Oil and Sustainability Program in collaboration with Nigeria’s Ministry of Petroleum Resources, focuses on developing micro-distribution points in Nigeria’s Edo State and establishing training facilities for local communities. The program aims to increase LPG availability while reducing health risks associated with burning wood or coal for cooking. This partnership is part of Nigeria’s broader strategy to reduce reliance on biomass and promote cleaner cooking solutions.

Meanwhile, financial institutions are also advancing LPG activities in Africa. Notably, the International Finance Corporation (IFC) partnered with Cameroonian energy retailer BOCOM Petroleum to enhance LPG access in rural areas, aiming to replace traditional biomass with cleaner energy alternatives and improve public health. The IFC is supporting this initiative with a €50 million financing package, which will fund the expansion of BOCOM’s main LPG storage facility and the construction of new regional distribution hubs across Cameroon. Additionally, the African Development Bank (AfDB) pledged $2 billion over the next decade to promote the adoption of clean cooking solutions. This commitment, which equates to an annual investment of $200 million, aims to achieve universal access to clean cooking by 2030. The funding will support various solutions, including LPG, gas-to-power and biogas.

“LPG stands to transform Africa’s energy sector, bringing cost-effective and reliable energy to millions of people. The continent’s reliance on biomass has not only imposed risks associated with security of energy supply but has resulted in a continent-wide health crisis. As a clean cooking fuel, LPG provides a tangible solution to mitigating these risks,” states NJ Ayuk, Executive Chairman of the African Energy Chamber.

During AEW: Invest in African Energy, the LPG session will explore the contributions of large consumers and regional markets, highlighting how LPG facilities are crucial for achieving economies of scale within the industry. Additionally, the potential of carbon credits and climate finance to drive growth in Africa’s LPG sector will be evaluated, with government policies analyzed for their role in accelerating the development of sustainable LPG ecosystems.

Distributed by APO Group on behalf of African Energy Chamber.

By NJ Ayuk, Chairman, African Energy Chamber (www.EnergyChamber.org).

Ahead of the November 2022 United Nations Climate Change Conference (more commonly known as COP27) in Egypt, Dr. Benedict Oramah, president and chair of Afreximbank, authored a thoughtful and compelling commentary about the economic and social impact of divestment from the production of fossil fuels in Africa. With fossil fuel use creating 65% of greenhouse gas (GHG) emissions, divestiture is at the heart of the global climate change agenda, and many Western banks are no longer financing investments in African oil and gas.

Dr. Oramah is not a climate science denier nor a fossil-fuels-at-all-cost advocate. In his paper, he is upfront and honest about the effect rising temperatures have already had on the continent, citing the devastation brought by extreme weather events — disastrous rainstorms on one hand, catastrophic droughts on the other. He casts a wary eye on the future, recognizing that developing parts of the world like Africa are at greater risk from climate change than are developed nations.

In his commentary, “Transiting to green growth in fossil export-dependent economies: A pathway for Africa,” Dr. Oramah acknowledges that urgent climate action is vital, that the time for foot-dragging is over.

At the same time, Dr. Oramah doesn’t overlook the fact that fossil fuels financed by foreign capital have been the economic engine of many African nations. Nor does he neglect to mention that, as major oil companies find themselves on the receiving end of divestment pressure and seek “less risky” assets, investment in the continent’s oil and gas sector has fallen significantly, from $60 billion in 2013 to $22.5 billion in 2020 by African Energy Chamber estimates. One shudders to think what would happen to the continent’s major oil-exporting countries — including Algeria, Angola, Equatorial Guinea. Gabon, Congo Republic, and Nigeria, where fossil fuels represent anywhere from 7% to 37% of GDP — should the industry evaporate altogether. As Dr. Oramah notes, “divesting from fossil fuel could cut as much as $30 billion off Nigeria’s GDP and almost $190 billion off the continent’s GDP.” The social and economic repercussions — some of which are already playing out as investment has tightened — would be profound as export earnings and revenues dry up, fossil fuel-dependent factories shutter, the already limited fossil fuel-powered grid is strained further, jobs are lost, and poverty ripples even farther through even more communities.

And, of course, the backdrop to all this is the fact that nowhere else is there an electricity deficit like Africa’s. Six hundred million people still live without a reliable source of power.

Fortunately, Dr. Oramah’s commentary isn’t without hope. He poses an interesting question: Is it possible to reconcile the world’s carbon reduction goals with Africa’s right to use its resources and achieve a smoother and “less painful” transition to renewables? He answers with a promising solution: using earnings from fossil fuels “to support an orderly economic diversification and structural transformation programmes and, importantly, to maintain a meaningful economic livelihood for the most vulnerable population.”

The institutional structure to accomplish those goals, Dr. Oramah says, is an African Energy Bank — which his bank is working to establish in partnership with the African Petroleum Producers Organization (APPO).

The African Energy Bank is expected to achieve four key goals:

Restore and leverage African and global investment flows into the continent’s oil and gas industry over a transitional period.
Mobilize funding to support investments into the energy value chain of its members.
Increase investment in transition fuel production and logistics.
Support diversification of the fossil-dependent economies to mitigate the economic cost of transition.

In addition, Dr. Oramah wrote, the bank will promote intra-African trade and investment to reduce the sizable carbon emissions derived from the externalization of Africa’s supply chains. Some 85% of Africa’s trade is extra-African.

It would be difficult, I think, to find fault with Dr. Oramah’s concerns, assertions, or well-considered plans. Redirecting current fossil fuel revenues to greener industries on a measured timetable with appropriate benchmarks — that’s how Africa can help mitigate environmental harm, stabilize vulnerable economies and prepare them for growth, and incentivize the development of low-carbon, green power across the continent. It’s a win all around.

The development of an African Energy Bank does one more thing, though it’s not mentioned in Dr. Oramah’s commentary.

It reduces our need for foreign aid, the traditional bandage for African poverty.

As I’ve written in my books and editorials, Africa doesn’t need hand-outs. They do more harm than good by blocking the potential and opportunities for poor people to help themselves. After all, it’s hard for local farmers to sell their crops or eggs or cattle when they’re competing with free food from a foreign government or institution.

What we do need are skills development, infrastructure, and enabling environments to build vibrant economies — things I sincerely believe are possible through the work of a multi-billion-dollar, pan-African energy bank and its capacity-building. The African Energy Transition Bank will serve as a catalyst for private investment. By channeling these funds into African projects, the bank will drive homegrown development and socioeconomic growth while increasing access to electricity for everyday Africans.

In short, Africans will be doing it by ourselves and for ourselves, without Western assistance or, more to the point, interference.

Dr. Oramah’s commentary gives the world a much-needed voice of reason when it comes to Africa’s energy transition. The pragmatic approach he proposes for Africa’s energy transition respects the global community’s need to slow climate change—and holds our continent responsible for helping the world achieve that vital goal. But it also shows that we can protect our planet and people without sacrificing African needs and priorities.

Distributed by APO Group on behalf of African Energy Chamber.

The African Energy Week (AEW): Invest in African Energy conference has secured the endorsement of South Africa’s Department of International Relations and Cooperation (DIRCO) for its 2024 edition, affirming the role of global energy diplomacy in shaping Africa’s energy future. DIRCO returns to AEW 2024 as a partner, following participation in last year’s event.  

South Africa’s energy sector stands at the crossroads of traditional reliance on coal and the exploration of oil and gas, alongside a growing shift toward renewable energy. The country has made significant strides in developing its offshore gas reserves, including the Brulpadda and Luiperd discoveries, estimated to hold a combined 3.4 trillion cubic feet of gas. International partnerships with companies like France’s TotalEnergies, QatarEnergy – which recently expanded its presence in South Africa’s Orange Basin – and Canada’s Africa Oil Corp. are vital to these efforts. At the same time, South Africa’s commitment to transitioning to cleaner energy – driven by its participation in global climate agreements – has attracted international investments including the $8.5-billion Just Energy Transition Partnership with France, Germany, the U.K., the U.S. and the European Union (EU) . This dual focus on traditional fossil fuels and decarbonization underscores the importance of international cooperation in South Africa’s evolving energy landscape.  

AEW: Invest in African Energy is the platform of choice for project operators, financiers, technology providers and government, and has emerged as the official place to sign deals in African energy. Visit www.AECWeek.com for more information about this exciting event. 

On the continent at-large, Africa’s hydrocarbon resources have made it a strategic player in global energy markets, attracting sizable foreign investments from global superpowers including China, the U.S. and the EU. China’s strategy on the continent has focused largely on energy infrastructure projects – with Chinese President Xi Jinping recently committing $51 billion in fresh investments in Africa over the next three years – while American operators continue to drive offshore exploration in Nigeria, Angola, Equatorial Guinea, Namibia and more. Meanwhile, the African Union has been collaborating with the EU to accelerate investments in renewable energy. The EU’s Global Gateway initiative has pledged to invest €150 billion in African development, with a significant portion allocated toward clean energy projects.   

Moreover, Africa’s energy sector is being impacted by global geopolitical shifts, including the Russia-Ukraine conflict, which has disrupted global energy supplies and forced Europe to seek alternative sources. This has led to renewed interest in African oil and gas, particularly from countries like Senegal, Nigeria, Libya and Algeria that have substantial gas resources, close proximity to Europe and planned regional pipelines underway. European nations are looking to Africa as a strategic partner to reduce dependency on Russian energy, further integrating the continent into global energy dynamics and highlighting the role of energy diplomacy in advancing Africa’s oil and gas sector. 

“We are honored to secure DIRCO’s support and endorsement of AEW 2024, which will contribute fresh perspectives and insights on how to create an enabling environment, drive investment and foster sustainable energy development across the continent. Cooperation – both within Africa and externally – is fundamental to achieving continent-wide energy access, industrialization and climate goals,” states NJ Ayuk, Executive Chairman of the African Energy Chamber.   

Distributed by APO Group on behalf of African Energy Chamber.

Maritime and energy firm China Bridge Energy is assessing project opportunities across Africa with a view to creating win-win collaborations and advancing the development of cost-effective oil and gas solutions. With experience in ship brokerage; financing and refinancing; ship building and conversion; and oil and gas projects, the company aims to use its Engineering, Procurement and Construction (EPC) and financing solutions to address energy challenges and drive long-term economic growth.

A delegation from China Bridge Energy is joining the African Energy Week (AEW): Invest in African Energy conference this November (4-8) to gain insight into African projects and partnership opportunities. With the aim of driving projects forward and fostering stronger commercial ties between Africa and China, the company is inviting African firms and energy stakeholders to engage during this year’s conference.

AEW: Invest in African Energy is the platform of choice for project operators, financiers, technology providers and government, and has emerged as the official place to sign deals in African energy. Visit www.AECWeek.com for more information about this exciting event.

China Bridge Energy has a history of offering support for large-scale project developments in Africa. The company collaborated with the China Petroleum Technology and Development Corporation (CPTDC) to offer an EPC and financing package for the Coral South FLNG project in Mozambique. China Bridge Energy selected the Hudong-Zhonghua Shipyard and Black&Veatch as EPC partners while mobilizing a consortium comprising CPTDC, China Development Bank and Bank of China to offer a financing package to cover 90% of the project’s required funding.

In Cameroon, China Bridge Energy provided support for the Etinde Field Project, comprising 1.7 trillion cubic feet of proven gas reserves. The company partnered with CPTDC and China Petroleum Pipeline Engineering (CPP) for the EPC. Additionally, to help fund the early stages, China Bridge Energy provided a short-term loan of $50 million (10% of the total contract price) and also arranged for another $50 million investment through the CMB Group to support the bidding process.

Additionally, in 2021, China Bridge Energy worked on a gas project in Morocco that involved three key components: building a gas processing plant, laying down pipelines and drilling wells. The company constructed a 120-km pipeline that connects to an existing pipeline to supply gas to local power plants. The project included drilling five wells before the gas was ready for use and seven more afterward. China Bridge Energy organized CPP to handle the plant construction and pipeline work

One of China Bridge Energy’s Nigerian clients is planning to build a FLNG facility with a storage capacity of 200,000 m³. The total cost of this project is $1.8 billion. China Bridge Energy reached out to the Bank of China and secured a financing solution for the project. For the construction, the company chose international contractors JGC and Technip to handle the entire process. In Ghana, the company provided an initial service plan for the Ghana Petroleum Hub – estimated to cost $60 billion. The project includes building refineries, storage tanks, petrochemical plants, jetties, a port and other infrastructure. To support the project, China Bridge Energy is working closely with its partners to offer both EPC and financing solutions.

Leveraging this experience, China Bridge Energy is assessing new opportunities in Africa’s energy sector. The company’s services include EPC solutions, with strong ties to Chinese shipyards such as China Merchants, Wison Shipward, China Ocean Shipping Company and more ensuring the effective procurement and construction of relevant modules for EPC projects. China Bridge Energy’s own shipyard has extensive experience in developing LNG modules. In terms of other engineering solutions such as pipeline, tanks and more, the company leverages its partnerships with professional engineering companies such as China Harbor Engineering Company, China Petroleum Engineering&Construction Corporation and others to provide full service ECP solutions.

In the financing side, China Bridge Energy offers a range of support to get projects off the ground. The company utilizes financing from both domestic banks in China, including the Bank of China and Export-Import Bank of China, as well as international corporations to support development. Opportunities for equity investments in projects are also available, with flexibility at the core of capital-raising. The company not only offers to provide a high percentage of the project’s financing but up to 50% equity investment. The company works closely with a range of Chinese off-takers, covering crude oil, LNG, LPG, methanol and other oil and gas-related products.

“China Bridge Energy represents a company that is focused on collaboration and unlocking real value across Africa’s oil and gas industry. With a strong project portfolio and experience operating across the African market, the company is committed to engaging with African government, national oil companies and private sector firms to drive more investment into African energy projects. This is what Africa needs: a strong global partner that is focused on value, collaboration and finding innovative solutions to project development,” states NJ Ayuk, Executive Chairman of the African Energy Chamber.

Distributed by APO Group on behalf of African Energy Chamber.