Natural gas remains key to Africa’s energy security and economic prosperity, even as political pressure grows to speed up the transition away from fossil fuels, according to the continent’s biggest development bank.
“Gas is fundamental to Africa’s energy system,” African Development Bank President Akinwumi Adesina said in an interview with Bloomberg News on Wednesday. “We’ve got to make sure that we’re pragmatic” and that a system is created to support long-term development, he said.
While natural gas is less polluting than other fossil fuels such as coal and oil, some environmentalists want to end its use because the industry is responsible for methane that has far more planet-warming power than carbon dioxide.
For African governments like Mozambique and Tanzania, where more than $50 billion-worth of gas projects are being discussed with companies including TotalEnergies SE and Equinor ASA, it tops the development agenda. In Kenya where the national electricity grid is already 90% renewable, authorities are considering converting the remaining fossil-fuel power plants to use liquefied natural gas.
Even if Africa tripled its natural gas output, it would add under 1% to its less-than 3% contribution to global greenhouse gas emissions, said Adesina. The world needs to “be fair to Africa” because the continent needs to industrialize and create jobs which requires a stable energy supply, he said.
Eskom Plan
The AfDB seeks to mobilize $25 billion, funding half of that itself, to support climate-change adaptation programs in Africa. The bank has financed renewable projects, including Africa’s single-biggest wind farm in northern Kenya, the world’s largest concentrated solar power plant in Morocco and is leading an initiative to plant trees and grasslands stretching 8,000 kilometers (4,970 miles) across the Sahara and Sahel drylands.
The development bank has invested almost $5 billion in South Africa’s Eskom Holdings SOC Ltd., which mostly burns coal to generate electricity. The utility estimates up to $35 billion will be needed over 15 years in order to make a transition to cleaner power sources.
“What is needed is financing on the table to allow them to make the investment that is necessary,” Adesina said, adding that the bank has been in discussions with the South African government about a plan. He declined to provide more detail.
Source: Bloomberg L.P.