Africa Finance Corporation Hosts Exclusive Investor Breakfast at AEW 2022

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Senior industry executives were joined by African Energy Ministers at an Investor Breakfast organized by the Africa Finance Corporation on Wednesday, discussing the continent’s energy transition strategy and access to global capital markets. 

The Africa Finance Corporation (AFC) hosted an Investor Breakfast on Wednesday as part of African Energy Week 2022 in Cape Town. The session served to showcase the AFC’s investment footprint across more than 36 African countries – totaling over $10 billion in the past 15 years – as well as outline its roadmap for Africa at the upcoming COP27.

Headquartered in Lagos, the AFC is a pan-African multilateral development financial institution established with the goal of bridging Africa’s infrastructure and industrial gap. Given that Africa contributes less than four percent of global greenhouse gas emissions, the AFC has identified three strategic pillars for an African energy transition outside of decarbonization, namely: enabling  localization, rebuilding infrastructure and developing Africa as a manufacturing hub and fostering financial innovation.

In attendance at the Investor Breakfast were H.E. Gabriel Mbaga Obiang Lima, Minister of Mines and Hydrocarbons of Equatorial Guinea, and H.E. Mahamane Sani Mahamadou, Minister of Petroleum, Energy and Renewable Energies of Niger. Notably, Equatorial Guinea recently joined the AFC as its newest member state, granting the Central African producer increased investment allocation, preferred access to AFC’s structuring and lending solutions, and reduced project debt costs, among other key benefits. 

“We have officially joined the AFC and are now able to tap into this new vehicle for investment,” statedH.E. Minister Mbaga Obiang Lima. “In Equatorial Guinea, we are focusing on three things: oil, gas and mining. Gas will be critical, as we already have the Gas Mega Hub initiative that transports additional stranded gas to our Punta Europa installations. Our first phase was the $400-million Alen gas monetization project, which was very successful – completed during COVID-19 and ahead of time. We are currently in talks with Cameroon and Nigeria about the possibility of bringing in additional gas.”

Leveraging strong partnerships, an infrastructure-focused investment approach and specialist knowledge in key priority areas, the AFC has backed several innovative projects geared toward the transition, including the first carbon-neutral industrial zone in Africa – the one-billion-dollar Nkok Special Economic Zone in Gabon – in which it invested $150 million.

“Africa bears the slightest brunt of the [climate] crisis we are facing,” said Osam Iyahen, Senior Director at AFC. “In trying to eradicate this issue, our white paper stresses that there are other ways we can address the transition outside of the current discussion that focuses on reducing emissions for African countries.”

Emerging oil producer Niger spoke about the role of cross-border infrastructure and regional financing mechanisms in West Africa, along with the importance of safeguarding African hydrocarbon resources within the global energy transition narrative.  

“When it comes to natural gas, Niger has a common project with Algeria and Nigeria – the 4,000-km Trans-Saharan Gas Pipeline – which will take gas reserves from Nigeria to European markets,” said H.E. Minister Sani Mahamadou. “This project can be a game-changer for all parties involved. For Niger, it will facilitate access to energy for our population, which is currently less than 20%. If we want to improve energy security, then we have to use our resources. We cannot sit on them and push forward other people’s narrative and ambitions. Africa should speak with one voice when it comes to COP27 and should avoid going there divided.”

The AFCechoed the need for lending institutions to prioritize natural gas project financing and development, as well as projects that help facilitate intra-African trade and create markets for processed goods.

“Our strategy going forward targets projects that have a high development impact, deal with the climate issue we are facing, and deal with gas monetization,” noted Franklin Edochie, Senior Vice President, AFC. “We are looking to do that aggressively and looking at gas-focused transactions, in terms of how to monetize reserves. A lot of mergers and acquisitions this year have quite a bit of gas in them.”

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