Coalition of NGOs urges financial institutions to stop sponsoring fossil fuel projects in Africa
They said fossil fuels projects did not only contribute to climate change but also had severe negative impacts on local communities and ecosystems.
This was made known to the Ghana News Agency (GNA) on Monday in a press release signed by the Chief Executive Officer of the Abibinsroma Foundation, Nana Kenneth Amoateng, on behalf of the coalition of NGOs in Africa, citing Afreximbank’s financing of fossil fuel projects in Africa.
“In as much as Afreximbank’s efforts in accelerating trade and investments across Africa through financial boosts and making the continent competitive in world trade, however, the bank should put a stop to supporting fossil fuel projects that pose a threat to environmental conservation, human rights, and sustainable energy transition on the continent.” Mr. Amoeteng suggested.
According to the release, the bank’s 2021 Annual Report indicated that approvals to the oil and gas sector rose from $2.41 billion in 2020 to $2.45 billion in 2021, accounting for 16.4 per cent of total approvals.
This situation is critical, the release said, because Afreximbank’s support for fossil fuel projects contravened Article 2.1(c) of the Paris Agreement, which encouraged companies to finance projects consistent with a pathway towards low Green House Gas (GHG) emissions and climate-resilient developments.
The coalition of NGOs therefore said, that, “If the investment initially intended for these fossil fuel projects were redirected to solar PV, it could cover more than a quarter of the cost of all Africa’s solar PV capacity additions to 2025.”
This is even so considering the fact that Africa’s energy potential, especially renewable energy, is enormous, yet only a fraction of it is currently being employed, not to talk about the potential of solar, biomass, wind, and geothermal energy.
Yet, as the release said, the fossil fuel projects Afreximbank financed in Nigeria, Mozambique, and East Africa had had significant socioeconomic impacts, including land grabbing, displacement, loss of livelihoods, increased poverty, and gender-related issues such as teenage pregnancies and gender-based violence.
“Local conflicts, militarization, and instability; environmental issues like land and water pollution, biodiversity loss, and the disruption of vital ecosystems directly undermine progress towards achieving the Sustainable Development Goals (SDGs), particularly SDGs 1, 5, 8, 10, 14, 15, and 16,” they added.
They asked Afreximbank to take a cue from the African Development Bank (AfDB) for its commitment to green and sustainable development in Africa with the recent launch of the African Green Financial Initiative demonstrating the Bank’s recognition of the urgent need to transition towards renewable energy and low-carbon development pathways.
The Coalition urged Prof. Benedict Okey Oramah, Chairman of Afreximbank, to sign the Glasgow Statement which called for a global effort to phase out subsidies and public support for fossil fuels and join other financial institutions in committing to end support for fossil fuel projects.
“By signing the Glasgow Statement, Afreximbank can send a powerful message to the international community, demonstrating its commitment to a cleaner, safer, and more sustainable Africa. It will also encourage other African financial institutions to take similar steps and accelerate the transition towards a renewable energy future,” said Samuel Okulony, Director Environment Governance Institute Uganda.
The coalition of NGOs observed that they understood that transitioning away from fossil fuels posed challenges, particularly in terms of economic considerations and energy security.
But the long-term benefits of investing in renewable energy far outweighed the short-term gains of fossil fuel projects, because renewable energy sources were not only cleaner and more sustainable, they also provided greater opportunities for job creation, poverty alleviation, and inclusive economic growth.
Among other things, they asked the bank to stop all plans to provide financial support for fossil fuel projects, including natural gas, and associated activities in Africa, and make a public announcement of this decision.
They also required that Afreximbank set an aspirational goal of helping the continent achieve universal electricity access by 2030 with a strong focus on encouraging clean and renewable energy solutions.
The bank was also to develop a new energy policy that will prioritize partnerships for clean energy development, mobilize domestic and international capital for innovative financing in Africa’s clean energy development and climate financing, and invest in clean energy projects that focus on regional integration of the power sector.
Other members of the coalition included Alliance for Empowering Communities, Ghana, Environment Governance Institute, Uganda, and Friends of the Earth, Togo.