A senior executive of the African Finance Corporation (AFC), a multilateral development institution primarily owned by Nigeria’s central bank and various African financial institutions, stated on Thursday that the AFC has no plans to discontinue its investments in fossil fuels according to reports from Reuters.
Despite the emphasis placed by governments and U.N. leaders during Africa’s inaugural climate summit in Nairobi this week on promoting renewable energy solutions from the continent, the pursuit of fossil fuel projects remains a significant priority for several countries.
Speaking to Reuters, the Executive Director of Financial Services at AFC, Sanjeev Gupta said,
- “We cannot and will not run away from doing fossil fuel-based investing because the development needs of the continent are so huge.
- “The world still needs energy security; the world still needs energy source diversity. No energy mix in the world in the next 50 years says no oil and gas, so why would we not develop our resources and fund our fiscal budgets?”
About the AFC
The AFC, headquartered in Lagos, is composed of nine members, predominantly hailing from Western African states. Ownership of the AFC is distributed as follows: 42.5% by Nigeria’s central bank, 47.6% by other African financial institutions, and 9.8% by industrial and corporate shareholders, as indicated on its website.
Funding for fossil-fuel energy projects
According to a recent report from the development charity ActionAid, global banks provided a total of $3.2 trillion in financing to the fossil fuel industry in Global South nations over the seven years following the 2015 Paris climate agreement. This agreement aimed to restrict global warming to “well below” a 2-degree Celsius increase by reducing emissions.
Analysis
The statement from the AFC official goes contrary to the resolutions reached at the just concluded Africa Climate Summit in Nairobi where African leaders called for more reform on taxes on major carbon emitting countries.
It also goes contrary to carbon credits which a lot of African countries are benefitting from especially Kenya which is the biggest recipient in Africa.
It is said that Africa holds about 40% TO 45% of global renewable energy potential with wind and solar energy bearing huge promise.
