Germany and Africa forge energy ties
June 6, 2022
One of the big topics of conversation at the 2022 German-Africa Energy Forum in Hamburg was Africa's abundant reserves of oil and gas.
In 2017, the African continent reportedly had 148.6 trillion cubic meters of proven gas reserves — more than 7% of the global reserves.
In 2019, Nigeria led crude oil exports in Africa, with more than 2 million barrels per day of oil sold on the international market.
In the same year, Africa's overall oil and gas production reached 327.3 million metric tons.
As of 2020, Africa's contribution to global oil exports reached nearly 9%.
Alternative to Russian energy
With a sixth package of EU sanctions targeting Russian oil now in force, Germany is keen to ditch Russian oil and gas for good and is looking at African gas as alternative.
The June 1–2 Hamburg meeting was an opportunity for key players in the German and African energy sectors to create win-win partnerships.
Many German companies are keen to finance African initiatives to produce hydrogen energy for export to Europe.
And African nations are also keen to power up using gas. They see it as a transitional fuel because natural gas produces lower carbon emissions than fossil fuels like oil and coal.
Exporting gas to Europe
Gas shouldn't be overlooked, said Ndiarka Mbodji, the CEO of a Berlin-based company providing energy solutions to Africa.
"You can see at the moment, with the Ukraine war that we are going through that the need to diversify the source of energy," Mbodji told DW. "
And if we look at the resource that Africa has in terms of, for example, gas, which is a source of transition, we can see its importance in Africa."
The forum came on the heels of German Chancellor Olaf Scholz's visit to Africa last month where he signed deals to support the necessary infrastructure to extract and export oil and gas to Europe.
Energy development projects are capital-intensive and require private-public partnerships, according to Ethiopia's energy minister, Sultan Wali.
"African governments cannot carry out these projects alone," Wali said.
"They need financial support from Germany and other rich western countries. This forum will create a strong ground for everyone."
Russian aggression
"Because of the war in Ukraine, you can see at the moment the need to diversify energy sources," said Ndiarka Mbodji, a Senegalese-French national and founder of Berlin-based Kowry Energy.
"Africa holds the key to resolving Europe's energy crisis. And if we look at Africa's resources, for example gas, you cannot underestimate its importance," she explained.
Last month, the European Commission announced plans to import 10 million tons of renewable hydrogen annually to replace fossil fuels in several industries and vehicles.
African nations are keen to have a piece of that business.
The African Union Commissioner for Energy and Infrastructure Amani Abou-Zeid said that for Europe to overcome its current security challenges, it needs to deal first with the energy crisis. And this means building strong partnerships with Africa.
"Europe is not secure until we are all secure," Abou-Zeid said.
"And the security of Europe now is not just about the weapons. It's about fuel, it's about energy, it's about food," Abou-Zeid said.
"So, no one is safe in Europe or secure in Europe until we are all safe and secure."
Africa's energy deficit
Despite such a positiveoutlook for Africa to provide renewable hydrogen to Europe— half of its population lacks access to clean energy. As a result, many households depend on burning biomass for energy.
For example, 95% of Ethiopians depend on biomass fuels, which directly impacts land production, according to Ethiopia's junior minister Wali.
Nevertheless, Ethiopia is trying to shift from hydroelectricity production to renewable energy, he told DW.
"Currently, we are changing our energy mix ratios from being dependent on only hydropower to a diversified energy source like solar energy, wind energy, geothermal and also other reliable sources," Wali said.
"Therefore, it is a vital forum for us to have a robust discussion about private and public partnerships.
Ethiopia boasts of huge ground and surface water reservoirs and hopes to negotiate with financiers to produce hydrogen energy.
Lack of investment
The African Energy Chamber (AEC), a non-profit organization that advocates for German-Africa partnerships, said Africa needs innovative and integrated solutions to make energy poverty history by 2030.
In a press statement released ahead of Chancellor Scholz's visit to Africa last month, the AEC said that load shedding had become a daily occurrence despite holding significant natural gas and hydrogen potential.
Moreover, it is only expected to worsen unless proactive measures are taken to scale up generation capacity.
"900 million lack access to clean cooking solutions largely attributed to lack of adequate investment and energy transition trends," the statement read.
In South Africa, however, the situation is different. Although President Cyrill Ramaphosa's government has developed a hydrogen policy, small companies that want to support its transition to renewable energy lack the necessary capital.
Funding growth
Zanele Mavuso, the Bambili energy group executive chairperson, based in South Africa, said, "it's not enough for her government only to lay a strong foundation for renewable hydrogen energy."
"It's about making sure you've got the capital to support the industry's growth. In addition, it would help if you had the finance to ensure that renewable energy projects can start and be sustainable over time," Mavuso explained.
While most African nations produce little carbon, they are most affected by the consequences of climate change and, at the same time, are the key partner in the decarbonization of the global economy.
Observers are keen to see what an African-led energy transition will look like and how African nations will become exporters of green energy and hubs for green-powered production.
Edited by Keith Walker