Page 7 - DMEA Week 42 2022

DMEA SECURITY & POLICY DMEA

Warlick, shown speaking at the AEW conference on October 18 (Photo: Twitter/@AmbMaryWarlick)

IEA rep says lenders should not cut off

financing for African oil and gas projects

AFRICA MARY Warlick, the deputy executive director – beyond ongoing problems such as droughts,
of the International Energy Agency (IEA), has food insecurity, poverty and extreme weather –
called on international financial institutions now that the war between Russia and Ukraine
(IFIs) and commercial lenders to show more had caused turmoil on global energy markets,
willingness to fund oil and gas projects in Africa. pushing prices upward.
Speaking at the Africa Oil Week (AEW) con-
ference in Cape Town on October 18, Warlick Africa Energy Bank
said she opposed calls for withholding funds Around the world, many commercial lenders,
from African fossil fuel projects on the basis of export credit agencies (ECAs) and IFIs have
environmental and climate risks. come under pressure to halt funding for fossil
Refusing to finance such initiatives, espe- fuel projects on the grounds that they will con-
cially when they involve efforts to expand the tribute to future carbon dioxide emissions. Some
use of natural gas, is counterproductive as it commercial banks and ECAs have pledged to do
hampers economic development, which is so, while a number of IFIs have opted to shift
necessary for making the switch to renewable their emphasis to renewable energy projects.
energy, she said. Afreximbank is one of the IFIs that has not
Thus far, Warlick continued, African coun- withdrawn from fossil fuels. And according to
tries have not been able to realise the full poten- Gbenga Komolafe, the CEO of the Nigerian
tial of their oil and gas resources. This is because Upstream Petroleum Regulatory Commission
they have not had adequate financial support, (NUPRC), it intends to team up with the African
infrastructure, technology or upstream, mid- Petroleum Producers Organisation (APPO) to
stream and downstream activity, she said. establish an Africa Energy Bank.
At the same time, she noted, the continent Speaking at the first annual conference of
is plagued by widespread energy poverty, with PENGASSAN, Nigeria’s main oil and gas work-
more than 600mn of its people lacking access to ers’ union, in Abuja on October 19, Komolafe
electricity and more than 900mn of its people said African countries had to find their own
lacking access to regularly cooked food. Even ways to finance fossil fuel projects as outside
though the number of people supplied with elec- lenders pulled back.
tricity rose between 2013 and 2019, it declined “We must begin to develop local innova-
between 2019 and 2021, she stated. tive financing solutions to develop our huge
Warlick emphasised the human cost under- gas resources as the number of international
lying these figures, describing conditions as traditional investors have dropped drastically,”
“truly staggering.” She also pointed out that the NUPRC head was quoted as saying by The
African states were facing an even bigger burden Nation (Nigeria). ™

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