原創 Lewis Ndichu 中國投資參考
Energy cooperation between China and Africa through the belt and road initiative (BRI) as one of the key policy frameworks to spur Africa’s economic growth continues to strengthen the Sino-Africa relations. However, the Covid-19 pandemic has caused more disruption to the energy markets, leaving negative impacts that will be felt for years to come.
According to the International Energy Agency (IEA), the annual global energy demand dropped by 6% in 2020, the largest shockwave of the past 70 years.
In particular, global demand for electricity decreased by 2.5% in the first quarter of 2020 with full lockdown measures causing a daily reduction of at least 15% in Italy, Spain, the United Kingdom, France, India, and the United States.
While Africa’s energy sectors were on a trajectory to growth, the unanticipated shock stemming from the Coronavirus (COVID-19) hit hard thwarting prospect for Africa.
Assessing the status of the energy sector in Africa
Whereas the COVID-19 has negatively impacted the ambitions of SDG7 (affordable and clean energy) initiative for Africa, the pandemic risks setting progress even further behind.
565 million people still lack access to electricity, and a further 900 million lack clean cooking solutions, with the global population without access to energy is likely to become increasingly concentrated.
In 2019, an IEA report indicated that 75% of the population without access now live in sub-Saharan Africa, a share that has risen over recent years.
On oil and gas, the continent’s share of global gas reserves is currently at 7.3%, aided by a substantial discovery made in Mozambique in recent years.
But many oil and gas projects across the continent have been delayed or cancelled due to the challenges of low prices and restrained demand caused by the pandemic.
According to the Rystad Energy, an energy research and business intelligence company, 「Sub-Saharan Africa, a perceived high-potential but also high-risk zone, is more in the crosshairs than other regions of the world.」
According to the African report, the price of Brent crude hit a low of $16.51 per barrel in April 2020, after starting the year at about $65 per barrel.
In April 2020, ExxonMobil announced postponement of its Area 4 gas megaproject in Mozambique until further notice.
Similarly, in February 2020, Tullow announced to let go of some 30% of its workforce in Eight African countries including Ghana, Kenya, Uganda, Côte d』Ivoire, Gabon, Equatorial Guinea, the Comoros and Mauritania.
However, with new major discoveries in Egypt, Tanzania, Senegal, Mauritania and South Africa in recent years the future could be different.
Collectively, according to the IEA, Africa accounted for over 40% of global gas discoveries between 2011 and 2018.
On Renewable Energies, first, Africa, has one of the largest sources of clean energy such as wind, hydroelectric, geothermal, biomass, and solar, all completely underdeveloped.
For instance, only 1% of geothermal and 10% of hydroelectric potential have been tapped.
Second, the energy infrastructure in Africa is still at its infancy, presenting an excellent opportunity to utilize emerging technologies and new power systems that are more efficient, resilient, and clean.
While the pandemic has heightened efforts on renewable technologies and the role they can play in increasing energy access, Covid-19 is conversely threatening future investment in all types of energy generation including renewable technologies.
In May 2020, the IEA forecasts that renewable electricity capacity will decline by 13% in 2020 compared with 2019.
Further , the Wood Mackenzie estimates, global solar and energy storage installations are expected to drop nearly 20% , while wind turbine installations are expected to decline by 6% in 2020.
In addition to the implications COVID-19, Africa is also constrained by pre-existing challenge of knowledge gaps, limited decision, lack of data and limited energy planning models and tools.
Analysis of the key development areas in Africa’s Energy
Africa has an excellent renewable energy potential and prices for renewable energy where complete shift towards renewable energy is considered feasible and affordable in Africa.
With aim to bolster Africa’s response to Covid-19, on April 2020, The African Union Commission (AUC) and the International Renewable Energy Agency (IRENA) agreed to work closely to advance renewable energy across the continent.
This has intensified the need to improve innovative solutions to drive the development of renewable energy.
Promisingly, this collaboration complements ongoing programmes within the African Union such as the Africa Bioenergy Policy Framework and Guidelines, Renewable energy in African island states Geothermal Risk Mitigation Facility; and the Programme for Infrastructure Development in Africa (PIDA).
In this regard, Clean Energy Corridors initiatives in East, West and Southern Africa are set to advance the deployment of renewables through the creation of larger and more robust power markets encouraging cross-border trade of renewable power.
These commitments taps on existing cooperation between the AU and IRENA to foster an enabling environment for low-carbon, climate-resilient renewable energy investment.
What are the main challenges affecting the China-Africa Energy Cooperation
Under the Belt and Road Initiative (BRI), Chinese national oil corporations (NOCs) and state-owned enterprises (SOEs) are actively involved in various energy sectors in Africa.
This activities are nearly in all sectors of the energy production chain, from extraction and energy generation, to energy transmission and distribution
In 2018, the Forum for China Africa Cooperation (FOCAC) resolved to make Africa’s energy poverty a key issue of economic cooperation.
By 2050, energy investments in BRI countries will reach $27 trillion by 2050, with $7 trillion alone going to power grid construction.
While the remaining $20 trillion will be distributed across other energy sectors including Oil and Gas, Geothermal and Nuclear. Further, in late 2019, The African Energy Chamber secured over $1.4 billion in intentions to invest in Africa’s projects in mining, oil & gas, power and renewable.
However, first, the volatile international landscape within the energy landscape has delivered a sudden and sharp drop in export revenue, increasing fiscal pressures on key producer economies across the continent.
Second, Renewable energy and energy efficient technologies have not attracted the level of investment or policy commitment they require and have not been widely disseminated in the region.
Resources allocated to developing renewable energy technologies and energy efficient systems are negligible in comparison to resources allocated to the conventional energy sector.
Third, the on onslaught of COVID-19 has not spared Africa’s energy sector, lockdown measures have put off-grid developments at risk and weakened the financial health of decentralized service providers.
Fourth, the sharp drop in export revenue and increasing fiscal pressures on key producer economies across the continent has delivered a sudden disruption and new investments may face delay or cancellation on the global oil and gas market.
Key policy directions for China-Africa Cooperation in the Energy Sector
In this regard, there is an urgent need for policies and actions to increase energy access, in the Post- Covid era so as to provide vital services in third industrial development decade for Africa.
Also, promoting projects within the AfCFTA that can be implemented through the BRI, will help Africa’s oil and gas exporters, seize the opportunity to re-evaluate their strategies to generate the most value and jobs across their economies and to promote broader economic diversification.
There is also need to ensure the continent has available and reliable energy sector that can drive Africa’s economic recovery. Thus, enhancing China-Africa cooperation will go a long way in helping to build robust, affordable, sustainable and resilient energy systems across the continent.
This will ensure that the impact of cross-border infrastructure is not restricted to international trade, but also enhances regional economies and intra-Africa trade.
Further, stimulus packages and incentives to target green energy transitions are not only critical for a post- COVID-19 recovery but also on a long-term basis to develop a reliable energy sector.
Finally, despite the challenges and the immediate problems brought about by Covid-19, investments in Africa’s energy sector remain generally untapped, and the BRI will act as a catalyst to spur Africa’s energy growth.
Editor | Zhang Mei
Design | Demi
本文刊於《中國投資》2020年11月號
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《中國投資》雜誌創辦自1985年，由國家發改委主管，國家發改委投資研究所、中國國際工程諮詢有限公司主辦，是我國投資領域唯一的中央級刊物，業界最早專注於投資領域趨勢報導的核心期刊。創刊三十多年以來，雜誌以全球視角看中國投資，涵蓋宏觀經濟、行業分析和企業投資案例，同時以全球市場為坐標，聚焦特定國家、地區和重大國際趨勢，目前已經成為世界各國政府官員、各類投資機構、專家學者、企業家以及記者媒體的專業對話平臺。
《中國投資》雜誌每期覆蓋包括上市公司在內的200多家央企國企和10000多家中國民營企業、1000多家中央與地方政府決策部門和機構、1000多家行業協會和商會、300多家主要金融機構等，是了解宏觀經濟環境、行業趨勢前景和企業投資案例的重要參考。
China Investment, founded in 1985, is a monthly under the supervision of National Development and Reform Commission (NDRC) China’s macro-economic management agency, It’s jointly operated by Investment Research Institute under NDRC, China International Engineering Consulting Corporation. Enjoying an exclusive position under the central government, China Investment is the core journal which started the earliest among similar magazines to focus on the investment trend. Over the past 30-plus years, China Investment has been in line with theglobal market as its fundamental coordinate with a strategic focus on specific countries and regional markets and those major international propensities. China Investment is a key dialogue platform for officials from different countries, investment agencies, experts and scholars, business people and journalists.
原標題：《Prospects for China-Africa Energy Cooperation in B&R Initiative》
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