Tackling emissions has come to dominate discussions around ESG, driving concerns that progress is slipping on tackling the energy gap that continues in many African states.
Investors are no longer simply looking for the best return on capital. Increasingly, they are also aiming to hit ESG targets, with a focus on the environmental impact.
As a result, oil companies have fallen from favour over the last couple of years. The industry has failed to highlight what it is doing to provide energy for local needs.
“Africa needs more in the way of energy progression, rather than transition, at this stage,” said Cany Jobe, director of exploration and production at the Gambia National Petroleum Corp. (GNPC), told attendees at the Africa E&P Summit last week.
“We must have bankable ways of having energy access. Clean and large renewable energy projects are not always bankable in the financing world,” she continued. “Where will Africa be able to derive the capital to access the transition?”
Impact over targets
Jobe went on to say The Gambia was facing a “starvation of interest and capital to develop our untapped reserves”. Currently, 80% of the people in The Gambia lack access to energy, she said. Additional revenues from hydrocarbon developments could go to tackling this issue.
BP had been planning to drill a well in the country’s A1 block. However, it relinquished the area earlier this year, with speculation that its energy transition plans had driven this decision.
A failure to provide reliable energy to local populations has a clear negative impact. Ex-BP exploration executive Jasper Peijs noted that Madagascans had cleared 80% of the country’s primary forest. “In the last 20 years, 4 million hectares have been cut down. That’s 2 gigatonnes of CO2 equivalent,” he said.
The problem is not just solved by providing, for instance, LPG stoves. GNPC’s Jobe noted that Senegal had achieved 90% penetration of LPG stoves “but it hasn’t increased use”.
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