G20 a catalyst for energy investment in Africa
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G20 a catalyst for energy investment in Africa
South Africa can leverage its G20 presidency to advocate for increased energy financing.
In 2025, South Africa will hold the rotating presidency of the G20. Given its position as Africa’s most industrialised nation and an energy hub, South Africa’s leadership could play a pivotal role in attracting investment to the continent’s energy sector.
By leveraging its G20 platform, South Africa can push for increased funding from global partners.
While renewable energy is rapidly expanding across the continent, Africa continues to rely heavily on coal, oil and natural gas to meet growing demand and drive economic growth.
Gas is increasingly viewed as a cleaner transitional fuel in Africa’s energy mix, and many G20 nations are leading investment in gas exploration and production across the continent.
For instance, the U.S. Export-Import Bank, U.K. Export Finance, China Development Bank and Japan Bank for International Cooperation, among other lenders, have played a key role in financing TotalEnergies’ USD20- billion Mozambique LNG project.
Additionally, several G20 countries are driving further investment, with Italy’s Eni developing new LNG facilities in the Republic of Congo, bp expanding operations in Senegal and Mauritania, Norway’s Equinor advancing the Tanzania LNG development and ExxonMobil spearheading Rovuma LNG in Mozambique.
Diversifying Africa’s energy mix
South Africa can advocate for G20 nations to increase their financial backing for new gas projects, which have the potential to boost production, enhance energy security and attract much-needed investment to the continent.
While natural gas is essential for Africa’s energy security, combining it with renewable energy sources could help diversify Africa’s energy mix.
South Africa’s own experience with large-scale energy projects, such as its successful Renewable Energy Independent Power Producer Program, can serve as a model for blending financing and developing both gas and renewable projects.
By advocating for mixed investment, South Africa can show G20 nations that supporting a variety of energy sources will allow Africa to meet its energy demands while transitioning toward greener energy.
In addition to advocating for investment in specific projects, South Africa can focus on creating favourable conditions for financing. One way to achieve this is by encouraging the G20 to support debt relief or concessional financing for African countries with high debt burdens.
This would free up resources for governments to invest in energy infrastructure and allow them to prioritise projects that will improve energy access and support economic growth.
Facilitating greater engagement
South Africa could work closely with organisations like the World Bank, IFC, BRICS Bank, European Investment Bank and more to unlock financing mechanisms that reduce the risk for international investors.
The role of South Africa’s G20 presidency in facilitating greater engagement between G20 nations and African energy markets cannot be overstated.
By using its platform to promote key energy projects, South Africa can attract much-needed investment for both traditional oil and gas and clean energy developments.
At the same time, it can help establish new financing structures that make these projects more attractive to investors.
African countries like Nigeria, Angola, the Republic of Congo, Senegal, Namibia and Mozambique stand to benefit from increased G20 support for their oil and gas sectors, and other African nations can follow suit by aligning their own energy priorities with the goals set forth by South Africa during its presidency.
Source: African Energy Week
This year’s African Energy Week (AEW): Invest in African Energies conference in Cape Town serves as a key platform for attracting global attention and investment to Africa’s energy sector, facilitating discussions among G20 nations, financial institutions and energy companies.
G20 a catalyst for energy investment in Africa