The Vice-President, Prof. Yemi Osinbajo, has said the banning or restriction by a growing number of wealthy nations of public investment in fossil fuels, including natural gas, will hurt Nigeria.
Osinbajo said this in an article published on Tuesday by Foreign Affairs, an American magazine of international relations and US foreign policy, with the title ‘The divestment delusion: Why banning fossil fuel investments would crush Africa’.
He noted that in April, seven European countries, including France, Germany, and the United Kingdom, announced that they would halt public funding for certain fossil fuel projects abroad.
Osinbajo said, “A little less than one-year prior, Norway’s sovereign wealth fund, the largest in the world, sold out of positions in major mining and energy companies because of environmental concerns. And in 2018, Ireland became the first country to pledge to entirely divest from fossil fuels.
“After decades of profiting from oil and gas, a growing number of wealthy nations have banned or restricted public investment in fossil fuels, including natural gas.”
According to Osinbajo, such policies often do not distinguish between different kinds of fuels, nor do they consider the vital role some fuels play in powering the growth of developing economies, especially in sub-Saharan Africa.
He said, “As development finance institutions try to balance climate concerns against the need to spur equitable development and increase energy security, the United Kingdom, the United States, and the European Union have all taken aggressive steps to limit fossil fuel investments.
The World Bank and other multilateral development banks are being urged by some shareholders to do the same. The African Development Bank, for instance, is increasingly unable to support large natural gas projects in the face of European shareholder pressure. Even UN Secretary-General António Guterres has called on countries to end all new fossil fuel exploration and production.”
The Vice-President said although all countries must play their part in the fight against climate change, a global transition away from carbon-based fuels must account for the economic differences between countries and allow for multiple pathways to net-zero emissions.
He said, “For countries such as my own, Nigeria, which is rich in natural resources but still energy-poor, the transition must not come at the expense of affordable and reliable energy for people, cities, and industry.
“To the contrary, it must be inclusive, equitable, and just — which means preserving the right to sustainable development and poverty eradication, as enshrined in global treaties such as the 2015 Paris Climate Accord.”
He said curbing natural gas investments in Africa would do little to limit carbon emissions globally but much to hurt the continent’s economic prospects.
According to him, in many African countries, natural gas is a crucial tool for lifting people out of poverty, as it is used not only for power but for industry and fertiliser and for cleaner cooking.
Osinbajo said across sub-Saharan Africa, natural gas projects were increasingly imperiled by a lack of development finance.
He said, “Gas pipelines and power plants in the most energy-hungry markets need development finance to attract other capital and enable such projects to proceed. In Nigeria, a consortium of international finance agencies helped build the Azura-Edo power plant, which by itself boosted our national capacity by 10 per cent.
“But many more such power plants are needed to deliver electricity to our people, to power our industry and growing cities, and to balance intermittent solar power. A blanket ban on finance for all fossil fuels would jeopardise those objectives.”
Osinbajo said instead of hampering the continent’s economic development, the rich world should help Africa’s energy producers secure financing for vital natural gas projects that could serve as a bridge to net-zero and for renewable projects and the modern grids required to handle them.
– Punch