UK INVESTMENT IN GREEN HYDROGEN AND RENEWABLE ENERGY IN AFRICA

The UK is very keen on starting green hydrogen and renewable energy development in Africa, with an investment of £13,000 million in clean energy. The UK has also decided to terminate its overseas assistance for fossil fuel projects in the continent.

The UK has been gradually reducing its support for overseas investments in fossil fuels since 2020. This year, it has terminated this assistance completely in light of its clean energy transition strategy and its goal to reach net-zero emissions by 2030.

Alastair Long, UK Trade Commissioner for Africa, stated that all current UK private sector investment pipelines in Africa (supported by the Government) exceed £10 billion. This funding is dedicated to clean energy projects.

The UK has shifted from oil and gas investment towards renewable investment within a year. Long noted that the UK’s contributions to renewables in Africa are greater than in any other region, as it works closely with Africa-specialised companies. For example, the UK is the largest renewables investor in South Africa. UK-based Globeleq is part of a syndicate that secured a total of 1.27 GW of solar and wind capacity in South Africa this year.

OFFSHORE WIND FARMS

The UK Government is particularly interested in supporting offshore wind farms in Africa. In 2019, according to the International Renewable Energy Agency (IRENA), 22% of Africa’s 232 GW installed power capacity was renewable. However, countries in Africa with access to electricity are still estimated to be less than 50%.

The continent remains dependent on the development of oil and gas resources to help bridge its power demand. Nonetheless, Africa has been under pressure from the international community to commit to the energy transition, even though it contributes only around 4% of global emissions.

The African Oil Week (AOW), held in Dubai from 8–11 November 2021, saw high-level participation from the energy sector. African ministers expressed frustration with global pressure to transition too quickly, emphasising the need for access to reliable power and energy security before fully shifting away from fossil fuels.

SECURITY WITH FOSSIL FUELS

In our view, countries should adopt a balanced approach, developing hydrocarbon resources while also advancing the energy transition. High-emission countries should reduce dependence on fossil fuels, and the UK is demonstrating strong progress in this direction.

Lower-emission countries still have energy access challenges and may continue to use natural gas within their energy mix, as seen in Mozambique. Such projects provide short-term energy security while supporting parallel investment in renewables. Senegal and Mozambique are examples of countries adopting a dual approach to energy development, combining LNG projects with renewable installations.

According to IRENA data, Senegal’s renewable capacity accounts for 19% of total installed capacity, having tripled since 2018.

The UK aims to optimise hydrocarbon production in Africa to support a smoother energy transition, which in turn could reduce long-term gas demand.

The UK’s flagship programme MOBILIST (Mobilising Institutional Capital through Listed Product Structures), which mobilises large-scale investment through public markets, received a £66 million funding boost at COP26 in Glasgow.

This additional funding will support the development of new investment products through an open competition aimed at improving access for developing countries to finance infrastructure, technology, and climate-related growth.

At COP26, the Chancellor of the Exchequer announced that winners from the first round would help deliver large-scale investment in clean and reliable infrastructure, including renewable energy. Two of the five finalists included Chapel Hill Denham Management Limited (Africa Infrastructure Equity Fund) and InfraCo Africa with Helios Investment Partners (The Climate Fund).

The latter will be the first pan-African climate-focused listed fund. It will support global development goals and align with the UK Government’s commitment to helping developing countries address climate change challenges and opportunities.

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EGB Engineering is an international engineering consultancy firm with expertise in power and propulsion systems. We provide sustainable and renewable engineering products and services to clients and operate across the aerospace, energy, and nuclear industries.