INTERVIEW: “Derisking Investment, Govt Guarantees, Public-Private Sector Partnership Key to Drive Development in German, African Relations” – Stefan Liebing, Conjuncta CEO
Dr. Stefan Liebing is the CEO of Conjuncta GmbH and Chairman of Rethinking Africa GmbH, a German investor and project development company specialized in facilitating investments for projects in infrastructure, renewable and conventional energy production, grids, raw materials projects, and other major industries.
In this interview with Ndubuisi Micheal Obineme, Managing Editor of The Energy Republic, Liebing discusses the ongoing progress at Rethinking Africa GmbH, as well as the complex issues surrounding German-African relations in the energy sector and the need for a change in Germany’s foreign policy in Africa. He also talks about his company’s involvement in project development across the African continent.
Furthermore, Conjuncta GmbH has been part of a consortium from the beginning and now brought in a new co-investor who joined a few weeks ago to develop a 600MW green hydrogen project in Angola, making history by becoming the first German private sector investor to invest in large-scale green hydrogen production in the African continent. Excerpts:
TER: Firstly, Rethinking Africa GmbH (RTA), a German initiative, was established in 2023 as a Special Purpose Vehicle (SPV) to drive German investment into the African continent. Its objectives are to develop clean energy projects and create job opportunities across the renewable energy value chain in Africa. How far has Rethinking Africa progressed, and what are the latest developments you would like to share with us?
Liebing: We have had an extremely good first year. The idea of RTA has never been to develop projects but to support the development of new investments in Africa by connecting relevant parties and helping them to take the first steps. The small RTA team has been overwhelmed by very strong interest from African leaders. We have met with three heads of state just during the past three months. And it is our clear rule that we do not set up meetings if we do not have specific investment projects to discuss.
TER: Interestingly, we have seen how Rethinking Africa has been progressing, holding business discussions with several African leaders including the Prime Minister of Cameroon, the President of Mauritania, and the President of Kenya, which may lead to project investments in those countries. What’s Rethinking Africa planning to do in these African countries? What specific projects have RTA identified as investment projects in their respective countries?
Liebing: We have also met with the President of Malawi and quite a few others. For each of these countries, we have discussed specific proposals in various sectors such as renewable and conventional energy, mining, IT, security, hydrogen, etc.
We got guidance on how to best bring these projects across the line. Since then we have put quite some effort into following up and moderating the process of these projects getting close to the final investment decision (FID).
TER: How is Rethinking Africa involved in the 50-megawatt solar farm investment project in Mzuzu, Malawi?
Liebing: One of our board members is planning to invest in this project. Rethinking Africa has identified the project, brought all required parties to the table, has presented the project to the Head of State, and is now helping with negotiations as we hope to come to the final investment decision in record time.
TER: Recently, your company- Conjuncta GmbH joined a consortium to develop a green hydrogen project in Angola, the first project in sub-Saharan Africa with an ambitious target to start exporting green hydrogen to Europe. What value will this project create between Angola, Germany, and Europe’s hydrogen sector?
Liebing: Actually we have been a founding member of the consortium three years ago and have been able to develop this project in cooperation with Gauff Group from Nuremberg (Germany) and Angola’s National Oil Company Sonangol. We now brought CWP Global on board, a Dubai-based developer and investor and we expect to accelerate the development process. As you rightly put it, there are great advantages for Angola, Germany, and Europe.
Angola will most likely become one of the first countries in the world to use its renewable energy potential for the export of green energy products and complement its oil and gas exports.
Angola will generate significant revenue from another pillar of its energy export strategy and will therefore be in a good position to be a front-runner in building a hydrogen economy.
Germany and Europe will not be able to implement their ambitious climate targets if they can not switch their current imports of fossil fuels to green products. This is what I call a classic win-win situation.
TER: In terms of the Angola hydrogen project development, are there plans to work with indigenous companies in Angola to develop the project? What is the percentage of local content and skills transfer this project will impact in Angola?
Liebing: Currently fifty percent of the project is owned by Sonangol from Angola. So this already demonstrates that it is not just going to be a European investment in an African country.
On the contrary, the project will have a significant local share and as we plan for the construction and operations phase, we will of course also look at how we can maximize local content in these areas.
As an oil-producing country, Angola has very clear and ambitious local content regulations in place that will guide us.
TER: Following our previous discussions, you highlighted that Conjuncta would soon become the first German and European investor to export Ammonia and hydrogen from Africa into Europe. What’s the latest update on the project?
Liebing: As you will have seen from recent announcements, we have just agreed for a new partner to join the consortium.
We have completed pre-FEED studies and are now about to kick off FEED. This makes the Angola hydrogen project one of the most advanced in the world. The results of FEED will determine the way forward and give us a clear view of the expected construction time.
TER: Moving forward, you have also been a strong advocate for a change in Germany’s Foreign Policy in Africa, underscoring the need for a new approach to dealing with Africa instead of foreign aid. What specific areas do you think the German government needs to improve its relations with its African counterparts and how can the German government provide support to Rethinking Africa now that it is investing in energy projects in Africa?
Liebing: Rethinking Africa is not looking for support, we currently do our work with the means of founders and board members. However, I think if we want to bring German activities in Africa to the next level, we need to completely reorganize our current approach to the continent.
The German Government is much more focused on traditional development aid. I do not think this brings any significant development to Africa and my experience is that many African Governments also see it this way.
Instead of spending money on paternalistic projects, I would recommend using the development budget for guarantees. The main bottleneck at the moment is the availability of risk capital for investment.
Many banks are still too conservative, in many cases, they are forced to do this by regulatory requirements. We could help them by taking over certain financing risks by the Government. This could make the difference for many projects that are in the pipeline but have trouble getting financing structured.
TER: What’s your advice to German companies in terms of investing in Africa?
Liebing: The biggest business risk of investing in Africa is not to be there. In many parts of Germany, people still have an outdated view of Africa and therefore perceive risk to be too high. While the past few years with many crises have not left Africa out, there is still a lot of great opportunity.
However, I strongly recommend working with partners who have strong experience, as both business models, target investment destinations and financing are getting more complex following recent difficulties on the continent.
I would recommend German investors not to be afraid of working with Governments in Africa. My impression is that a Public-Private Sector Partnership (PPP) can be a very stable model as German investors can bring technology, know-how, and access to financing, whereas local public partners can provide experience on how to work in the country, deal with regulatory requirements and help to create political stability for a project.
TER: What are the challenges you identified in investing and doing business in Africa? What can the African government do to create an enabling environment in driving more German investments into the African continent?
Liebing: As in many countries, bureaucracy is always a problem. It requires strong political will to accelerate bureaucratic processes and to bring together all authorities that need to be involved. This can sometimes take more time than we have. So streamlining bureaucratic requirements is certainly something that I can recommend – this is also a big problem in Germany, by the way, and not unique to Africa.
TER: How can the African private sector including companies partner with Rethinking Africa for project development?
Liebing: We welcome any serious proposal for projects that are well-defined and thought through.
We will check and assess the doability of these and – if confirmed – invite German partners and investors to the table to find a way to implement them.
TER: Are there any ongoing discussions or partnership prospects between Rethinking Africa GmbH and other prominent African institutions such as AFCFTA, African Union, and ECOWAS, among others?
Liebing: At the moment, it is our impression that many specific projects are handled on a national level. While we are in exchange with multilateral organizations from time to time on an investment level, we currently focus on national Governments and local private entrepreneurs.
TER: Notably, we discovered that Rethinking Africa is focused on investing in projects from East and North Africa only. Why is that happening? Any plans to expand investments into other regions such as West Africa, Southern Africa, etc.?
Liebing: We do not have a regional focus and are open to similar activities with any African country.
Recently, we have been active in Malawi, Kenya, Mauritania, and Cameroon. But we have also been discussing projects with many other countries behind closed doors. So any country is most welcome.
TER: How much has Rethinking Africa invested in the African energy sector so far?
Liebing: As explained before, we as a platform do not invest ourselves. In some cases, our founders and board members do.
My own company for example is pursuing some multi-billion-dollars projects in hydrogen.
One of our fellow Directors is into solar PV investment. He has spent some 100 million dollars, and through Rethinking Africa, is currently looking at new investments in a similar range.
For any project presented to us from the African energy sector, we will look for German investors to implement them.
TER: Are there plans to establish Rethinking Africa’s overseas offices in Africa?
Liebing: For the moment, we do not expect that a formal and permanent office is required. We work in a very slim way with only a few full-time resources in Germany and with our board directors working from different locations. My experience is that a combination of virtual meetings and traveling, in combination with strong local partners, can work very well.
TER: What is your outlook for Rethinking Africa investments in Africa in the next 5 years?
Liebing: Germany has a total investment volume in Africa of around 13 billion Euros at the moment. I hope we can bring this to 20 billion Euros within five years from now, especially given the huge hydrogen projects in the pipeline.
I hope ReThinking Africa can play a small role in making this happen.
