Climate campaigns to halt financing of all new oil and gas projects would threaten crucial investments to fix Africa’s transportation and unlock clean cooking potentials on the continent, a refining group has warned.
The African Refiners and Distributors Association (ARDA) in a recent statement warned that campaigns by interest groups on account of climate change could worsen urban pollution
According to Anibor Kragha, former Nigerian National Petroleum Corporation (NNPC) Chief Operating Officer and executive secretary of ARDA, the major financial institutions and export credit agencies (ECAs) have come under mounting pressure to freeze the funding of oil and gas projects.
“These campaigns can obstruct important initiatives to reduce pollution from petroleum-based fuels in Africa,” he said.
The African Refiners & Distributors Association (ARDA) is a pan-African organization for the African downstream oil sector that says it is committed to improving the quality of fuels marketed within the African continent to ensure that the projected increased medium-to-long term energy demands do not result in unmanageable levels of urban air pollution.
While speaking at a side-line of a conference with economic intelligence, Kragha said that outsiders should not be able to dictate how development capital can be used across the continent.
Read also: Renewable electricity growth is accelerating faster than ever worldwide – IEA
“Africa has its own distinct hierarchy of needs and its energy requirements will rise by 45 per cent to 50 per cent over the next two decades, with the continent accounting for one in every two people born in the world between now and 2040.
“Africa’s current transport fuel mix comprises 11 different grades of gasoil/diesel based on sulfur content and 12 grades of gasoline,” he said.
In the same vein, Arda estimates also show that “harmonizing” those fuels to make their specifications similar to those of Euro 5 fuels by 2030 will require investment of around $15.7 billion in refinery upgrades. Without those upgrades, Africa’s growing cities will face a public health crisis, which is due to the high-sulfur content of its current fuel mix.
In a bid to solve the financing issues, Kragha has urged governments and private-sector financiers to engage in a dialogue to define acceptable forms of oil and gas financing that recognizes there is no single “one-size-fits-all” path for the energy transition.
Nevertheless, he hopes that off-take agreements with traders and partnerships with engineering, procurement and construction firms and technology providers could provide a framework for ECAs and banks to approve at least some oil and gas financing.
The former Chief Operating Officer for the Refineries & Petrochemicals Directorate of the NNPC also said that the COP26 climate talks in Paris last month made progress toward a new definition of environmental justice that would allow African nations to chart their own path to net-zero emissions.
He also stated that he intends to work hard in the run-up to next year’s COP27 talks in Egypt to create a “groundswell” of support for alternative energy transition paths and timelines in regions such as Africa.
