Nigeria and other African countries advocating for gas as a transitional energy option face significant funding challenges. According to a new report by the Natural Resources Governance Institute (NRGI), only $13.7 billion of the planned $151 billion in power and gas infrastructure projects is under construction. This amounts to just 9.07% of the total investment needed.
The report highlights the need for proper planning, especially given the global shift away from fossil fuels. NGRI’s Tengi Gorge-Ikoli and Aaron Sayne emphasize that pro-gas voices must explain why gas is the best option for achieving energy, economic, and climate goals.
Countries should also develop plans to transition sectors like power and transport away from gas. Civil society actors, researchers, and the media should question the risks of continued investment in gas and explore whether alternative technologies could deliver better outcomes.
In regions with significant gas reserves and established infrastructure, gas might be a feasible temporary option. However, as technological advancements address intermittency issues, renewables will become more competitive. The report notes that burning gas for electricity is less polluting than coal or fuel oil, but global gas consumption must be halved by 2050 to meet the Paris Agreement goals.
Countries like Colombia, Ghana, Lebanon, Mexico, Nigeria, and Senegal advocate for boosting their gas production to end fossil fuel imports. However, building the necessary infrastructure remains challenging due to insufficient investment capital. Lower- and middle-income countries struggle to finance large gas projects, and foreign investors are hesitant to commit.
The report also highlights that foreign funding for gas projects in lower- and middle-income countries is becoming scarce. Only a few large commercial banks are willing to lend money for these projects, and interest from foreign private equity is limited.
Despite these challenges, the report suggests that gas could still play a role in Africa’s energy transition. Countries with significant gas reserves and infrastructure might find it a more reliable option for power generation in the short term. However, the long-term goal should be to transition to renewable energy sources.
In conclusion, African nations face significant hurdles in securing the necessary funding for their gas projects. The limited investment capital highlights the need for a comprehensive strategy to transition to renewable energy while addressing immediate energy needs. The NGRI report underscores the importance of planning and international support to achieve these goals.
Source: The Guardian
