AEC Launches ‘The State of African Energy 2022’ Annual Report
Launched in a webinar led by Executive Chairman NJ Ayuk, the report outlines the forces shaping Africa’s energy sector, providing valuable insight into actionable solutions, investment trends and opportunities, as well as key focus areas for 2022 and beyond.
The African Energy Chamber (AEC) has officially launched its highly anticipated 2022 outlook for the African energy sector. Dubbed ‘The State of African Energy 2022,’ the report provides a detailed understanding of the continent’s sector, introducing key insights and reliable and actionable information through the exploration of the forces shaping Africa’s energy industry. Representing the continent’s premier investment report, the outlook provides global and African stakeholders with a detailed understanding of current and emerging investment trends, offering up data-based solutions to the challenges faced by the industry.
Launched during a webinar on Monday the 25th of October, the AEC’s outlook is considered critical for energy stakeholders as they try to navigate Africa’s energy sector in the face of the global COVID-19 pandemic and energy transition-influenced market shift. Moderated by AEC Executive Chairman NJ Ayuk, the webinar’s panellists included Nosizwe Nokwe-Macamo, AEC Advisory Board Member; Dean Foreman, Chief Economist, American Petroleum Institute and Advisory Board Member of the AEC; and Rolake Akinkugbe-Filani, AEC Advisory Board Member.
During the webinar, panellists provided insight into what readers can expect as well as key takeaways from the 2022 outlook. One of the primary topics identified was the need for a balanced, Africa-centric energy transition, one that incorporates the needs of the African continent within global climate mitigation strategies. Specifically, the report offers up an African perspective to global energy transition dialogue, emphasizing how the continent needs to prioritize making energy poverty history whilst at the same time ensuring carbon emissions are reduced.
“I want to pose a question as we reflect on the report, which is a brilliant summary on the state: can we achieve making energy poverty history by 2030, whilst simultaneously achieving net zero at all costs by 2030. Which agenda do we need to prioritize as far as the African continent is concerned? We know that over 600 million people have no access to energy, and that we need to reduce emissions. Energy poverty is a big priority for the African continent and if we look at what is happening today with the impact of the covid pandemic and recovery growth, addressing poverty should be the topic of Africa’s agenda,” stated Akinkigbe-Filani.
“Yes, 2020 and 2021 have really been exceptionally difficult years for the industry from all aspects, considering crude price, the decrease in capex, force majeures, the sanctioning of projects and so on. However, when I looked at the outlook, I am actually left encouraged for 2022. In certain areas the prognosis might not be as optimistic as last year, but by and large, one can see some green shoots which should be taken advantage of for the good of the African continent. As the world is moving along the transition, the pace at which Africa can move should be taken into consideration. The green shoots are there, let them be taken advantage of by different countries,” stated Nokwe-Macamo.
“The need to alleviate energy poverty is one of the things that absolutely must be addressed when you consider the energy transition. These are important considerations where it is easy to get lost in the global energy transition dialogue,” stated Foreman.
Meanwhile, the webinar discussion provided valuable insight regarding Africa’s natural gas sector, with investment trends and regional opportunities granted a primary focus. As the panellists suggested, the outlook will be critical in assessing Africa’s natural gas future, as the report emphasizes challenges, opportunities, and innovative solutions to accelerating growth.
“Most large-scale gas projects taking place in Africa have cross broader dimensions. And as far as these projects are concerned, there are strategic consensus that have had to be reached. We have to harness these resources because they are relevant for our economies,” stated Akinkugbe-Filani.
Finally, the outlook emphasizes that holding significant resources does not necessarily result in accelerated socio-economic growth. Rather, supportive regulation, market-driven policies, and investment friendly fiscal terms will be critical if the continent is to realize its energy sector and economic objectives. With the world competing for global capital like never before, the AEC’s outlook emphasized the role that regional cooperation, harmonized regulations, and attractive business landscapes will play in 2022 and beyond.
“How do you secure your financing? By thinking creatively about deal structures, together with risk mitigation, thinking about strategic partnerships, and what it takes to make a sustainable and attractive fiscal regime. The concept of loadshedding that the report talks about is not an emerging market problem. As we contemplate shifting from fossil resources, the reliance of the grid is in question. I would encourage governments to become proactive and use the instruments at their disposal to mitigate risk. Africa’s greatest resource is people. With a combination of people, technology, and banks, and perhaps cooperation, you can take the lead in lowering your own cost and bringing more development across the continent,” stated Foreman.
“Successful energy transition will require the proper stewardship of the countries natural resources. Now we have challenges of upstream capex, and we know there is competition for global capital. Asia we will see has an appetite for African oil and gas. What is mean is that on the continent we have to raise our game. Governance and stewardship is key. We are running out of time in ensuring we put up the proper structures in terms of regulations and governance to make more attractive for investors,” continued Akinkugbe-Filani.
“You can get better economies of scale when you regionalize projects and reassess the manner in which deals are structured. You also have to have harmonization of regulations so you will start having cross border collaboration in terms of finance. If we don’t do it, who will?” continued Nozwe-Macamo.
“Everyone should be very proud of this young and talented team at the Chamber that has worked day in and day out to make this happen especially Verner, Motheo and team. I know it has not been easy dealing with a tough taskmaster like me. I am forever grateful” Stated NJ Ayuk, Executive Chairman of the African Energy Chamber.
“As we prepare for COP26 and an interesting 2022, with the onslaught that Africa stands to face from a radical drive on climate change by those who have emitted the most GHG and refuse to make energy poverty is priority, Africans must stand strong and protect their energy industry like a junkyard dog in the face of a hurricane” Added Ayuk.
“We must be thankful to the energy sector that has been the backbone of Africa’s recovery. We at the Energy Chamber must continue to believe in our key values of free markets, limited government, fiscal discipline and personal responsibility and urge governments to refrain from engaging in excessive regulation or high taxes on the energy sector” Concluded Ayuk
Serving as form of a prelude to African Energy Week (AEW) 2021, taking place in Cape Town on the 9th-12th of November, the launch of ‘The State of African Energy 2022’ will be both transformative and imperative for Africa’s energy sector. Representing the continent’s premier energy event, AEW 2021 will promote the insights gathered in the AEC’s outlook, offering stakeholders a detailed understanding of African markets, trends, and opportunities.
AEW 2021, in partnership with South Africa’s Department of Mineral Resources and Energy DMRE, is the AEC’s annual conference, exhibition and networking event. AEW 2021 unites African energy stakeholders with investors and international partners to drive industry growth and development and promote Africa as the destination for energy investments.