Members of the AEC Investment Committee (www.EnergyChamber.org) bring a wealth of finance and energy industry experience and creative thinking that is essential to address the enormous funding gap facing the energy sector is facing in Africa.
- African Energy Chamber to focus on new ways to bring investors directly to opportunities in Africa
- Members of the investment committee bring over 100 years of combined industry experience across Africa.
- Committee members present were: Rolake Akinkugbe-Filani, Commercial Director – Mixta Africa; Folarin Lajumoke, vice-president – Africa, LOI; Nosizwe Nokwe-Macamo, Executive Chairman and Founder – Raise Africa Investments; Gontse Moseneke, CEO – Infrastructure Mahube and Robert Erlich, Partner and Executive Director – Upstream, Cayo Energy LP
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The Investment Committee of the African Energy Chamber (the Chamber) has met for the second time since its appointment in mid-last year, to set an agenda that will facilitate the mobilization of capital for energy projects in Africa. The committee recognized the increased difficulty of raising capital for energy projects in a post-Covid era. However, the committee unanimously agreed that African energy projects remain extremely profitable, when approached with the right investment structure. According to the World Economic Forum, “Africa’s urban population is expected to nearly triple by 2050, to 1.34 billion”. Therefore, there is a strong need for energy investments to meet their needs, to facilitate the development of industry and the creation of much-needed income and jobs.
The discussion focused on solutions to the current lack of investment. “The traditional way of investing is changing.” Said Nosizwe Nokwe-Macamo, Executive Chairman and Founder of Raise Africa Investments. “The African Energy Chamber must seek to tap into non-traditional funding streams and look beyond the usual geographic hot spots for investments.” She added.
Likewise, Rolake Akinkugbe-Filani, Commercial Director of Mixta Africa, stressed that “To begin with, we need to be able to clearly articulate the energy need in the various African countries and what the different opportunities are. Where possible and appropriate, we should tap into local funding sources as well as other largely unexplored sources of funding, such as pension funds. There is an appetite for African infrastructure projects, but we must think about encouraging innovation to meet multiple objectives. Develop infrastructure and traditional energy sources, while promoting the transition to renewable energies. The Chamber, its partners, its members and its wider network must link opportunities to funding opportunities. “
Gontse Moseneke, CEO of Mahube Infrastructure, said: “We need to use this current situation to find out where new opportunities arise. Our natural resources must be translated into permanent capital, and bodies like the House are needed that are bold enough to facilitate the provision of the energy necessary for this purpose. On the energy transition, he said it was an opportunity for Africans to restructure, knowing that localization is essential.
Finally, Folarin Lajumoke, vice president for Africa at ION stressed that “governments have a critical role to play in finding much-needed capital to finance oil and gas projects. Recent events create a very competitive landscape on a global scale. In order to push investors to Africa, tax conditions should be reviewed taking into account the return on investment of a potential investor or explorer. Many tax terms are no longer suited to their purpose given the emerging trend of energy transition. The financing of hydrocarbons in Africa will compete not only with similar opportunities on other continents, but also with other sectors such as agriculture, technology and renewable energy. In a bearish market, the fiscal conditions and policies in place could tip an explorer / investor from one geological basin to another. Another major challenge is the uncompromising exploration bureaucracy. Exploration helps reduce geological risk, thus attracting investment. Unattractive fiscal conditions, coupled with bureaucratic excesses towards exploration, are toxic to capital raising. In addition, African NOCs have an important role to play in becoming full cycle energy companies that seek opportunities outside their own country. A diversified NOC such as Qatar Petroleum or Petronas is better placed to raise capital for growth / expansion than another. It is also politically strategic for the essential growth of intra-African trade. “
It is with this in mind that the African Energy Chamber will appeal to interested investors and project leaders to approach the chamber and benefit from its network of partners and members to facilitate the implementation of the project. “We will continue to partner with the private sector and governments around the world to attract critical funding for energy projects,” said Samantha Raoult, director of international relations at the chamber.
As a first step, it is imperative to identify the energy needs in different African countries and directly approach a range of potential investors across the continent and around the world to meet the market needs. The Chamber is the voice of the sector and will continue to build bridges that bring together governments and businesses in the African energy industry to find common ground.
The coming year is important, with flagship projects from Senegal to Mozambique, via Equatorial Guinea. If there is a global need for low-carbon energy projects, it is important to put into context that, combined, African countries account for just over 3% of global greenhouse gas emissions, then that they are home to 14% of the population. Our main mission in the House is to continue to fight energy poverty and encourage the development of African resources to improve the livelihoods of Africans. Collaboration, adaptation to the changing environment and leveraging local resources will be essential to achieve this goal.