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Natural gas can accelerate economic growth of Africa

Africa’s natural gas resources have the potential to accelerate socio-economic growth and eradicate energy poverty.

Accordingly, many nations are seeking enhanced investment in order to maximize and monetize resources. As the continent’s premier energy event, African Energy Week (AEW) 2021, aims to build on this momentum, promoting innovative strategies to monetization, addressing challenges hindering development, and chartering a way forward for the African gas sector.

Speaking at an investor forum under the theme ‘Monetizing Natural Gas: Current Opportunities and Challenges,’ panel participants investigated Africa’s natural gas landscape.

Participants at the panel included Mamadou Goumble, CEO Energy Business, JCG; Frank Fannon, Former United States Assistant Secretary of State for Energy Resources; Olakunle Williams, CEO, QSL; Dr Tshepo Mokoka, COO, CEF; Gabriel Lorenzi, VP of Sales, Galileo Technologies; and Taiwo Okwor; Vice President, Investments, African Finance Corporation.

During the discussion, participants provided insight into how African gas projects can be made more bankable and attractive for international investors.

With the continent aggressively pursuing the development of its natural gas resources so as to ensure sustainable socio-economic growth, Africa’s gas has garnered significant regional and international attention.

“The limitation is that we as African countries have from a research and development point of view.

There are two constraints for us to develop: financing and technology. We have to find ways of financing our own development. You need to find better ways of opening up the space. If we depend more on FDI, we rely on Ministers in Europe,” stated Dr Mokoka.

“At the end of the day it is about risk and reward. Some of the key things are around the regulatory framework and lack of credibility, of which one of the key points is transparency.

There needs to be predictability and regulatory framework that is planned for the long term.

The second aspect is around security of supply. There needs to be ample gas reserves and uninterrupted supply. Another other aspect is around lack of regional integration.

There is no realistic approach to planning infrastructure assets. If you want to develop your natural gas you need to think about transmission aspects and distributions aspects to both the domestic and international market. If you can address these, you will see a lot more international and local investors,” stated Okwor.

“We strongly believe small scale is the solution. From a financial point of view, it is always easier for financial organizations to approach the financing of smaller projects that can be scaled.

This will be a game-changer. Start small and then scale up. We need to provide jobs while at the same time providing solutions to scale up,” stated Lorenzi.

Meanwhile, the panel discussed actionable strategies to enhance investor interest in gas infrastructure projects across Africa. With the African Continent Free Trade Agreement (AfCFTA) providing new and improved trade opportunities for stakeholders within the energy industry, the panel promoted intra-African gas markets, made possible through enhanced infrastructure developments.

“The AfCFTA is a wonderful opportunity for everyone in Africa. it will open up the market.

Already the testament of the AfCFTA is already being shown. In June 2021 a 1 single electricity market was passed. How do you integrate yourself into one energy market in Africa? 60% of the world today is used for manufacturing.

We need to channel more gas towards our industries, creating a supply chain that will take our gas resources to demand centers around Africa,” stated Williams.

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