We are the continent that is seeing the lowest amount of investment in energy in the world and that must change, says AEC Executive Chairman NJ Ayuk
In the relentless crusade to make energy poverty history, the African Energy Chamber under the leadership of Executive Chairman NJ Ayuk are embarking on a stronger push for energy finance to help fund critical projects across the continent. At the upcoming 2024 African Energy Week in Cape Town running from 4-8 November, a major innovation will be the African Energy Finance Summit. With multilateral financial institutions like Afreximbank and S&P Global Commodity Insights as key partners, the Summit will showcase the myriad of emerging opportunities available and connect relevant investors to the projects, says NJ Ayuk.
Fielding questions from PAV, NJ describes the first quarter of the year as a mix bag for the African Energy sector. Enormous challenges with astronomically high numbers in millions for people with no access to electricity and clean cooking fuel, but equally exciting perspectives in terms of the potential that continues to be discovered and the slow but steady progress the continent continues to make, says Ayuk.
“Africa Week 2024 is going to be a blockbuster. We are excited about what we see. People who traditionally have not turned to us are right now part of this movement. Last year we said we are not a conference; we are an energy movement. We are energy people who believe that Africa’s time is now,” NJ Ayuk, tells PAV in the interview.
The AEC was in Luanda for the Africa-EU Parliamentary Assembly, in Ghana for another energy event, and you were recently received by President Macky Sall of Senegal. May we know some of the dividends for the African energy sector from these high-profile engagements?
Angola is an oil-producing country that has received a lot of investments to go into the Lobito Corridor, which is very important for the U.S. and other partners around the world, but also for Angola, the DRC, and Zambia. So, you are seeing a lot of fresh money coming into Angola but also there is a push towards a move by hydrogen, not just defined by Western powers but also by Angolans themselves. We wanted to be part of that discussion; our colleagues from the Chamber were in Angola for this Africa-EU Parliamentary meeting.
It was a great opportunity to speak to members of parliament and engage with them because these are decision-makers whether we like it or not it has to be a content outreach, speaking to our European colleagues, getting them to understand our African perspective, when it comes to climate, energy poverty, producing and using natural gas and our roadmap towards a transition. It is an honour to have the chamber being invited, leading this discussions, and giving Africa a voice.
We also have to take into consideration that these same EU members are the ones that will pass legislation saying that gas is green in the EU, and they can fund it but natural gas is not green in Africa and we are still staying in poverty and we are not having the chance to develop ourselves. Getting to engage them is important but we also have to keep tabs on their legislative actions and how their legislative actions like that carbon tax that they are working on imposing and other tariffs that they are doing, will affect Africa.
We also must look at our trade deficit; we are buying more from EU countries than we are selling to EU countries. We are refining a lot more African petroleum in the EU than we are doing so in Africa. This kind of thing needs to be addressed; we have to build refineries, LNG facilities in Africa so that we can process gas in Africa, we can refine our crude in Africa and deal with our fuel scarcity and also produce fertilizers. It is always an intense dialogue; I will be looking to go right back to the European Union and have more discussions with them.
In Ghana it was important to participate at the African Energy Technology Conference. We had discussions about the African Energy Bank with APPO, and the Ghanaian Minister of Energy. It was important for me personally to go into Ghana and also meet with Ghanaian companies looking at accessing energy infrastructure and what they are doing when it comes to gas development and also ensuring energy security.
Ghana is going to be looking to increase production through the jubilee fields. They are also looking at giving out more oil blocks this year. There are going to be intriguing things happening in Ghana.
Macky Sall who was on his way out has been one of the most consequential Presidents in African history; he came into office and reduced term limits and when it comes to the energy industry, he has been a champion. He drove Senegal towards getting the first gas and first oil. He did amazing to get Mauritania and Senegal to work on a deal where cross-border disputes have always been a big problem across Africa. You cannot get a deal done and so most oil and gas are stranded in the ground because of cross-border issues; a case in point is Cameroon and Equatorial Guinea. They can't get a deal done and they can’t even move faster on the Chevron Yolanda project as there is a big pause there.
Macky Sall changed that when it came to the GTA area; he did just amazing to get that project going. With the SANGOMAR project, they are going to start producing in that country. The energy poverty rate in Senegal has been cut down; renewable growth has surged. He signed on the energy transition partnership with the international community; became a spokesperson for the African energy sector and improved the economy and massive infrastructure. We do salute that kind of leadership but what is even more beautiful is the democratic transition that was observed. We are hoping that the new president will be successful and will ensure that the goals, hopes and ambitions of the Senegalese people are going to be met. We are very confident that the new president is going to do well, if not, better when it comes to energy.
With early endorsement from multilateral institutions like Afreximbank and S&P Global Commodity Insights, the African Energy Finance Summit has game changing potentials, says NJ Ayuk.
Next month the AEC will be playing a leading role at Invest in African Energy 2024 in Paris. What is the sales pitch you are making to investors and other energy stakeholders for this forum?
Africa is ready, Africa is prepared, and Africa has amazing opportunities. Those opportunities have to be harnessed by Africans. It is not just enough to see foreign investors coming to the continent and profiting alone; everyday people need to be part of that growth. They need to have jobs; they need to have contracts. It is going to be a new way of investment, a new way of looking at investing in Africa not just in its natural resources but also in its people.
What we are going to be seeing is investment coming in from the Emirates, we are seeing from Qatar, Saudi Arabia, U.S.A. China, across the European Union coming right down to Paris. We are going to be seeing possibly about a thousand investors gathering there. You’ll be seeing pitches from African leaders and African businessmen, and we hope to see a lot of deal signing.
We are going to be having roundtable dialogues with EU members of parliament on the transition and where we want to go. We have to be careful about this; there is no energy transition without us dealing with energy poverty. There is no transition without dealing with Africa's deficit when it comes to industrialization and manufacturing. This is Africa's time. We have to seize this moment and issue a clarion call to develop and industrialize Africa. Industrializing does not damage the climate. Industrialization does not hit a climate bomb.
As much as we will be welcoming a lot of investors, we are not going to compromise, and we are not going to back away from our right to produce every drop of natural gas we can find in Africa.
To potential investors out there skeptical about the investment climate in Africa what are the reassuring messages you have for them about current African realities and any key metrics to enthuse them?
A lot of what has scared investors in the past has been the lack of data. Africa has been a continent where a lot of African countries have not worked on producing data on some of the changes that have come. The Doing Business Index by the World Bank shows that a lot of African countries have improved; a lot of African countries have better regulatory and fiscal regimes that are working. We are seeing democratic transition and good governance in a lot of African countries.
We do have our setbacks, but there is a big push to see that we remain attractive. A lot of businesses understand that a free and structured market is important, but an enabling environment is even better to attract foreign direct investments into the continent. While we are on that topic, we have to know that it is not just about foreign direct investment coming from Western countries; it is also to encourage intra-African trade.
When we trade with ourselves, when we attract cross-border investment, then we are investing in Africa, driven by Africans. We need to put the AfCFTA into effect immediately and start dealing with issues we don't want to touch, dealing with visas across Africa and working on other issues like reducing the rate of red tape and cutting taxes.
African leaders understand today, and most governments that the Chamber has worked with have started to understand that we are not competing just between Zimbabwe and Mozambique or Ghana and Nigeria or Cameroon and Senegal. We are competing between Gabon and Guyana; we are competing between Congo and Qatar. It is not just passing legislation saying we are attractive now; we need to be on top of our game every day.
We have to say what we can do to be more attractive, what can we do to make capital more welcome, and what can we do to make Africa the capital of hedge funds, private equity, and new financial houses so that they can deploy capital, invest more in infrastructure, energy, roads, bridges, railways, schools, education, healthcare facilities. When we do that, you will see the true potential of Africa being unleashed, especially its young people.
African Energy Week 2024 is going to be a blockbuster .We are energy people who believe that Africa's time is now, says NJ Ayuk.
How are preparations going for the AEW 2024?
African Energy Week 2024 is going to be a blockbuster. We are excited about what we see. People who traditionally have not turned to us are right now part of this movement. Last year we said we are not a conference; we are an energy movement. We are energy people who believe that Africa's time is now. Being able to prepare this, we are seeing great confirmation from many energy ministers coming together. we are seeing a lot more push around the finance community. So, there is going to be a big focus on finance, how can we finance our energy growth, renewables, oil, and gas and more.
We are seeing great engagement with international partners from the United States, Europe, Mexico, China, the Middle East, and others. We think it will be a big profit for the African continent because most countries view the African Energy Week as the ideal place where they can meet investors, where they can do deals and exchange vital information. Data is going to be key. We are working with data houses and technology providers to be able to see how we can improve data collection and drive out data on Africa.
We are excited this year and I think the oil companies and gas producers are excited but there is something that most people don't see. We are going to have a big downstream play in this year's Energy Week and Africa's voice is going to be heard right before COP29. We are going to make sure that Africa Energy Week will be the world's last energy meeting before going into COP. Our goal during the Energy Week is to ensure that we leave Cape Town with one solid message and that Africa will be speaking with one voice. We will be able to tell them that Africa needs energy now and we are going to produce every drop of hydrocarbons we can find to save our people and industrialize Africa.
The African Energy Week (AEW) recently announced the Launch of the African Energy Finance Summit; may we get some insights on this?
The Finance Summit is going to galvanize funds, hedge funds, capital-raising institutions, banks, and any kind of financiers to fund Africa. What is happening is that the chokehold in financing is a big problem and that is something people have shied away from and not addressed. There has been a big movement when it comes to the divestment of fossil fuels and cutting funds when it comes to investing in African energy. We are the continent that is seeing the lowest amount of investment in energy than any other continent.
We cannot just rest on our laurels and just wait. We have to do something by saying we have to get together in an Energy Finance Summit, bringing together all these players, bringing at least 30 African finance ministers, bankers, and central bank governors to deal with this critical issue. We hope to have the African Energy Bank properly represented but we have been very thankful to the African Export-Import Bank for the amazing support on this venture. We are getting the African finance house together; you can’t tell me that a continent that has 2.5 trillion dollars of private capital cannot raise sometimes 100 million dollars to do a project. We want to be able to drive up African capital and we make capital believe in Africa as we believe in this continent.
If an Energy Finance Summit is going to be big, it is going to be important, this is the first time in Africa's history that this has happened. We are proud to carry that cause on behalf of not just the energy sector, but everyday Africans that need energy so much.
Can you shed some light on the partnership with multilateral financial institutions like the African Export-Import Bank and S&P Global Commodity Insights, what role will they be playing?
They are bringing a lot of data; they bring a lot of insights and, they bring money. They bring so much knowledge that has been there; they like the Chamber and what we do at Energy Week because we have a platform where we can bring these issues to the table and bring leadership to one house. S&P, being a global institution listed in stock exchanges around the world, can bring some of the best financial houses and top experts from around the world to work with us hand-in-hand.
Data is important; being able to look at the data and crunch it and see where the money is going and how money can come in. We are very proud to have S&P together with the African Export-Import Bank. It will be great to see what comes out there. We will make financiers excited once in their life.
Based on what Aliko Dangote has done in Nigeria with the Dangote refinery, does the AEC think that his example is what others in corporate Africa should be emulating on energy investment?
For a long time, we have seen Africans become wealthy, and invest more in another continent than in Africa. Aliko Dangote did the reverse of that and said I am going to bet on Africa, and I am going to put my money in this continent. I am going to bet on Nigeria and create opportunities and jobs. He built the world's largest single refinery. He galvanized funding from everywhere, put his own money where his mouth was and did that. I think that is a great example of Africans taking action and solving a problem.
Nigeria produces so much crude, but the country has to export its crude outside Nigeria to import finished products into Nigeria. You can think how much that cost for everyday people of Nigeria to be able to buy fuel. Dangote did not just build a refinery; he also built a petrochemical facility. They are going to look at doing clean ammonia, and fertilizer, so you'll be able to power Nigeria and Africa’s agricultural basis so we can produce more food for ourselves and not have to wait for Ukraine and Russia to give us wheat.
When you drive agriculture in Africa you create jobs and opportunities. These are the kinds of byproducts from these big investments. It is a road map to encourage other Africans, not necessarily billionaires but also multimillionaires, and small investors to bet on the continent and go big. We need to put more of our money into Africa because that is going to give us a chance to grow and do something bigger than our interests.
As a leading energy voice in the continent, what are some of the projects and in what countries should investors be taking a closer look?
I am an African and the first thing I recommend is every country. I am a Cameroonian and I recommend everybody go and invest in Cameroon. I love this continent so much and I think South Africa with its amazing beauty, and great environment is an amazing place right now to do gas-to-power projects; they have a well-defined structure. You are looking at Mozambique where there is gas, and they could invest in that midstream to drive and produce more power in the country. Look at pipelines that you are going to see across the continent; small pipelines, whether going from Namibia to Zambia. Look at Nigeria; they are making some great moves with gas. There are going to be so many opportunities whether it is looking around the Niger Delta or looking at new fields in shallow or deep-water Nigeria is going to make a play.
I love what they are doing in Congo Brazzaville with the gas. They are turning around to be a gas game. It is an exciting moment. Equatorial Guinea is looking at new investors in its upstream; they want to drive up more oil production and more gas to go into that EGLNG facility which is a world-class facility run by U.S. Company Marathon. Africa is not short of investment; you just need to come in with the money, the technical skill, and the ability to work hand-in-hand with Africans, knowing that you will have to partner with the private sector to drive this.
The idea that you will only come to Africa and work with the government is old. You need to find like-minded people who can also invest. What is beautiful for international investors today looking at the continent is that you have Africans who have money. They are not just waiting for you to bring all the money; they are ready to match you with your finances.
Africans don't need you to help them; they are not begging you to come and save them, they are asking you to partner with them and when you partner and work with them, then you can grow together. As much as we want investment, we need to walk away from the mentality that we are going to save those poor Africans because we are moving beyond aid. We are looking for the right partnerships and more investments that will show that we can also prove and show that the world must and should respect our people because we are producing African excellence at its best.
