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The African continent is faced with an extremely difficult energy ‘trilemma’ – the largely underdeveloped bloc needs to find a way to manage its energy production and imports in a way that balances sufficient and reliable energy with affordability and sustainability. Achieving all three of these essential axes is extremely difficult, particularly in the short timeline African leaders are faced with.
Africa has some of the most underdeveloped energy grids on the planet, and is simultaneously facing the world’s biggest population boom. The continent’s population is expected to double between now and 2050; by midcentury, a quarter of the global population will be in sub-Saharan Africa. The result will be a rapidly expanding energy and infrastructure gap in the coming decades. Today, around 600 million people in Africa completely lack access to electricity, and the continent’s energy demand is expected to increase threefold over the next decade as sub-Saharan Africa grows, develops, and industrializes. Meeting this demand would require power generation capacity to increase ten-fold by 2065.
Despite contributing the least to global greenhouse gas emissions, African nations are poised to suffer the most and the soonest from climate change. So while developing their national economies and bringing electricity to their populations is of utmost importance to the leadership of African nations, so too is keeping additional greenhouse gas emissions out of the atmosphere. For these reasons, experts agree that Africa will have to “leapfrog” over the use of fossil fuels – traditionally the next step in economic development – straight into developing wide-scale renewable resources.
The scale of the effort required to achieve this leapfrog presents critical challenges for African nations, which largely lack strong governance, resources, and capacities to achieve such dramatic overhauls in infrastructure and policies. The sector is contending with a number of overlapping and potentially destabilizing forces, including climate change initiatives and policies, ‘resource nationalism’ and competition over critical minerals, and increasing foreign exchange and control in the African energy and resource sectors.
China has long been a heavy investor in African energy. China is already Africa’s biggest bilateral trading partner. Since 2000, China “has financed billions of dollars worth of large-scale infrastructure projects” across the continent through the ambitious Belt and Road Initiative. However, very little of China’s investment in Africa has been directed toward clean energy development. “Lending for renewables, such as solar and wind, from China’s two main development finance institutions constituted just 2% of their $52 billion of energy loans from 2000 to 2022, while more than 50% is allocated to fossil fuels,” Reuters recently reported.
However, in the wake of the Russian war in Ukraine, the Western world is also increasingly looking for energy sources to replace Russian imports and ramp up economic pressures on the Kremlin. Many of these actors are increasingly looking to Africa to fill that gap. In 2023, Africa “attracted a growing share of global greenfield megaprojects, six of them valued above $5 billion,” according to the UN’s Trade and Development organization.
All of these factors are likely to lead to an increasing number of disputes and conflict within and between African nations during this time of flux. A 2022 survey report by Queen Mary University of London (QMUL) found that nearly a third of respondents believed that Africa will see the largest growth of energy-related disputes in the world in the coming years. British-American law firm Norton Rose Fulbright also notes that in the context of Africa’s impending clean energy transition, “the protean regulatory environment, the pace of development required, the variety and number of stakeholders, supply chain complexity and the deployment of new technologies within aging infrastructure all create fertile conditions for disputes.”
Furthermore, Norton Rose Fulbright notes that there could also be an explosion of legal disputes arising from all 54 African nations’ commitments to the Paris Agreement. The 2015 climate accord, which is legally binding, could spark “an increase in claims by investors seeking to rely on treaty obligations that safeguard stable, equitable, favourable and transparent investment conditions.” Global law firm White & Case also predict an impending wave of climate change disputes across Africa.
At the state level, there are also key legislative measures and corporate reorgs unfolding which could contribute to this fertile ground for dispute and conflict. Law.com notes that South Africa’s long-beleaguered electric utility Eksom is undergoing a much-politicized restructuring, as well as changes in tax codes in Nigeria and Kenya, could be key contributors to increasing conflict and litigation across the continent. They report that “African disputes lawyers predict a 2025 surge in litigation driven by energy and tax sector reforms, environmental claims, and evolving technology.”
By Haley Zaremba for Oilprice.com
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