African CSOs call on Afrieximbank to cease Funding Fossil Fuel Projects

FOR IMMEDIATE RELEASE

AFRICAN CSOS CALL ON AFREXIMBANK TO CEASE FUNDING FOSSIL FUEL PROJECTS IN AFRICA AND SIGN THE GLASGOW STATEMENT

June 19^th 2023

We, the representatives of African NGOs working for just energy transition, want to express our deep concern regarding the ongoing support for fossil fuel projects in Africa. As we are aware, these projects not only contribute to climate change but also have severe negative impacts on local communities and ecosystems.

Africa is one of the most vulnerable regions to the impacts of climate change, with rural communities already facing the devastating consequences of droughts, floods, and extreme weather events and this is accelerated by the continued investment in fossil fuels for which Afriexim bank has continued to ignore science and allocated annually billions of dollars  in to the sector

Africa’s energy potential, especially renewable energy, is enormous, yet only a fraction of it is currently being employed. Similarly, the technical potential of solar, biomass, wind, and geothermal energy is significant.

Clean energy remains a key backbone of Africa’s new energy systems, powered increasingly by renewables. Africa is home to 60% of the best solar energy potential globally, yet only 1% of installed solar PV capacity. Solar PV – already the cheapest source of power in many parts of Africa – outcompetes all sources continent-wide by 2030. Renewables, including solar, wind, hydropower, and geothermal, account for over 80% of new power generation capacity by 2030 in Africa.

In as much as freximbank’s efforts in accelerating trade and investments across Africa through financial boosts and making the continent competitive in world trade, however, the bank should put a stop to supporting fossil fuel projects that pose a threat to environmental conservation, human rights, and sustainable energy transition on the continent.” Kenneth Amoeteng

According to the bank’s 2021 Annual Report, between 2020 and 2021, approvals to the oil and gas sector rose from US$2.41 billion in 2020 to US$2.45 billion in 2021, accounting for 16.4 percent of total approvals.

Afreximbank’s support for fossil fuel projects contravenes Article 2.1(c) of the Paris Agreement, which encourages companies to finance projects consistent with a pathway towards low greenhouse gas (GHG) emissions and climate-resilient developments. If the investment initially intended for these fossil fuel projects were redirected to solar PV, it could cover more than a quarter of the cost of all Africa’s solar PV capacity additions to 2025.

It is worth stating that the fossil fuel projects Afreximbank financed in Nigeria, Mozambique, and East Africa have had significant socioeconomic impacts, including land grabbing, displacement, loss of livelihoods, increased poverty, and gender-related issues such as teenage pregnancies and gender-based violence. Local conflicts, militarization, and instability; environmental issues like land and water pollution, biodiversity loss, and the disruption of vital ecosystems directly undermine progress towards achieving the Sustainable Development Goals (SDGs), particularly SDGs 1, 5, 8, 10, 14, 15, and 16.

We want Afreximbank to take a clue from the African Development Bank (AfDB) for its commitment to green and sustainable development in Africa. The recent launch of the African Green Financial Initiative demonstrates the Bank’s recognition of the urgent need to transition towards renewable energy and low-carbon development pathways. We believe Afreximbank can do the same.

However, we believe that Afreximbank needs to do more to align the Bank’s investment policies with the goals of the Paris Agreement. It is crucial for Afreximbank to take a stronger stance against fossil fuel projects and shift its focus towards supporting renewable energy initiatives and sustainable infrastructure development.

In light of this, we urge Prof. Benedict Okey Oramah, Chairman of Afreximbank, to sign the Glasgow Statement and join other financial institutions in committing to end support for fossil fuel projects. The Glasgow Statement, calls for a global effort to phase out subsidies and public support for fossil fuels. “ By signing the Glasgow Statement, Afreximbank can send a powerful message to the international community, demonstrating its commitment to a cleaner, safer, and more sustainable Africa. It will also encourage other African financial institutions to take similar steps and accelerate the transition towards a renewable energy future.” Samuel Okulony Director Environment Governance Institute Uganda

We understand that transitioning away from fossil fuels poses certain challenges, particularly in terms of economic considerations and energy security. However, we firmly believe that the long-term benefits of investing in renewable energy far outweigh the short-term gains of fossil fuel projects. Renewable energy sources are not only cleaner and more sustainable but also provide greater opportunities for job creation, poverty alleviation, and inclusive economic growth.

We call upon Prof. Benedict Okey Oramah to demonstrate leadership and vision by signing the Glasgow Statement and urging Afreximbank to divest from fossil fuel projects in Africa. Together, we can build a thriving, sustainable, and resilient continent, where the benefits of development are equitably shared, and the impacts of climate change are effectively mitigated.

In response to this urgent need, the signatories call on Afreximbank to take the following steps:

1. Stop all plans to provide financial support for fossil fuel projects, including natural gas, and associated activities in Africa, and make a public announcement of this decision. It is a critical moment for Afreximbank to act and divest from fossil fuels, which are the major contributors to the climate crisis. Immediate action is needed because Africa’s energy future requires stronger efforts on the ground that are backed by global support.

1. Show your dedication to combating climate change and supporting renewable energy by endorsing and signing the Glasgow Statement.
2. Afreximbank must set an aspirational goal of helping the continent achieve universal electricity access by 2030 with a strong focus on encouraging clean and renewable energy solutions.
3. Develop a new energy policy that will prioritize partnerships for clean energy development, mobilize domestic and international capital for innovative financing in Africa’s clean energy development and climate financing.
4. Afreximbank should invest in clean energy projects that focus on regional integration of the power sector. This will create economies of scale, permitting lower costs across all aspects of infrastructure, including power. Estimates show that cross-regional collaboration could reduce electricity costs in Africa by US$2 billion per year.

For media inquiries, please contact:

Eca-watch African Team

AbibiNsroma Foundation

[email protected]

1.Matey Richard                                                                    2. Nana Kenneth Amoateng

Alliance for Empowering Communities Ghana                                     AbibiNsroma Foundation Ghana

[email protected]                                                   [email protected]

3. Samuel Okulony                                                    4. Amegadzé Kokou

Environment Governance Institute Uganda                        Friends of the Earth Togo

[email protected]                                                                   [email protected]

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