Op-Ed: Financing Energy Access in Africa: Leveraging Fossil Fuel Revenues to End Energy Poverty (By NJ Ayuk)
In an emissions-focused world, do oil and gas revenues have a role to play in ending energy poverty in Africa? It may sound counterintuitive, but many would argue that they do, albeit as enablers of a future powered by alternative energy sources.
The key lies in recognizing that Africa's situation is unique, and solutions take time, building on what we have and what we can do with it. This means that, in working towards a just energy transition, the continent's oil and gas resources shouldn't be viewed as obstacles that need to be immediately replaced by renewable energy sources. Instead, rather than prematurely phasing out fossil fuels in response to global pressure, Africa should harness these revenues responsibly to finance its energy transition and ultimately eradicate energy poverty.
Prioritizing Development Alongside Sustainability
Nearly 600 million Africans still live without access to electricity (https://apo-opa.co/3U6V4uH). This access is a fundamental human right, yet energy poverty remains one of the continent's most significant barriers to development. This undermines health systems, education, industrialization, and dignity. As the world debates how to rapidly achieve net-zero, Africa's priority is different: how to power its people now, while building a sustainable future.
Measuring Africa's energy transition progress against external calls for an abrupt end to fossil fuels risks leaving millions behind. Our continent contributes less than 4% (https://apo-opa.co/4odEQxF) to global emissions, yet we are expected to decarbonize at the same pace as industrialized nations that built their wealth on hydrocarbons.
Instead, the continent's abundance of fossil fuels should be viewed as a bridge, not a barrier. The African Energy Chamber (AEC) Africa-Paris Declaration (https://apo-opa.co/3GO1ImM) underscores this principle – Africa's oil and gas revenues can and must be used as a financial lever to invest in electrification, clean energy, and infrastructure projects. This pragmatic and just approach prioritizes development alongside sustainability, not instead of.
There are several ways to achieve this. First, reinvesting oil and gas revenues into rural electrification can transform communities. Decentralized solutions like off-grid solar and mini-grids offer practical ways to reach remote areas. Although urban dwellers do experience power outages, for many rural populations, it's a way of life. For the mother cooking with firewood or the student studying by candlelight, a small solar grid is life-changing. Fossil fuel revenues can finance these systems at scale, bridging the immediate access gap while longer-term grid expansions are in progress.
Second, establishing innovative financing mechanisms is essential. For instance, the fledgling Africa Energy Bank (https://apo-opa.co/4l5R2Of) aims to bridge the continent's estimated $31 billion to $50 billion annual energy funding gap by focusing predominantly on financing energy projects. Launched in 2025, the bank is poised to play a transformative role in mobilizing capital for African energy projects. Additionally, global investors are increasingly exploring energy investment opportunities in Africa. In support of this, development finance institutions, such as the African Development Bank, the World Bank, and the International Finance Corporation, are de-risking investments by offering concessional loans, guarantees, and technical assistance, making investment in African energy projects more attractive.
Third, policy reforms that create enabling environments are critical. Here, governments have a role to play in prioritizing revenue-generating projects, creating stable regulatory frameworks, and offering incentives for public-private partnerships. This will support investment, reduce risks, and unlock the transformative power of energy access.
These solutions demonstrate the importance of a fair and equitable transition and the vital role that fossil fuels will continue to play in achieving this goal. They also prove that this goal is achievable, even if it is on the continent's own terms.
Unique Solutions to Africa's Energy Challenges
Africa's path to net-zero has the same end goal as the rest of the world, but it can't mirror their journey. Our starting points are different, and our development needs are urgent. We understand that climate action can't be delayed. But it can be just, inclusive, and rooted in African realities. And it can also be supported by revenues from our abundant natural resources.
The Africa-Paris Declaration notes that 'a fair transition recognizes that fossil fuels remain valuable for Africa's development, prosperity, and energy access goals. Africa doesn't need to choose between oil and gas or renewables. Given our current position, all are important and require both strategic and sensible deployment. Fossil fuels generate the revenues to invest in solar, wind, hydropower, and grid infrastructure. They fuel industries that create jobs. They support healthcare, education, and innovation.
When managed responsibly, Africa's fossil fuel revenue can serve as a bridge to a brighter, greener, and more prosperous continent. Will it be quick and easy? No. Will some question the approach? Most certainly. But the alternative is leaving hundreds of millions of people in the dark.
Distributed by APO Group on behalf of African Energy Chamber.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Zawya
4 hours ago
- Zawya
Africa's Gas Sector Gains Momentum through International Partnerships
As the global energy landscape shifts toward cleaner fuel sources, natural gas is taking center stage in Africa's energy transition, with international collaboration playing a key role in unlocking the continent's vast gas potential. Africa holds approximately 6% of the world's natural gas reserves and is expected to contribute significantly to the global LNG supply by 2030, particularly through projects in Mozambique, Nigeria, Senegal and Mauritania. With global LNG demand forecast to rise at a CAGR of 1.5% through 2030, Africa is strategically positioned to meet this demand – especially from markets in Europe and Asia. Signaling renewed investor confidence in the continent's upstream natural gas potential, Austrian energy company OMV recently resumed exploration activities in Libya's Sirte Basin. In partnership with Libya's National Oil Corporation, OMV recently spudded the ESSAR well in Block C103 and is advancing an infrastructure-led campaign focused on unlocking reserves near existing production facilities. OMV will participate in this year's African Energy Week (AEW): Invest in African Energies 2025 conference – taking place from September 29 to October 3 in Cape Town –, where the company's Executive Vice President Berislav Gašo will join NJ Ayuk, Executive Chairman of the African Energy Chamber, in a fireside chat to explore partnership models, cross-border collaboration and strategies for enhancing investment and technical capacity across Africa. AEW: Invest in African Energies is the platform of choice for project operators, financiers, technology providers and government, and has emerged as the official place to sign deals in African energy. Visit for more information about this exciting event. With major developments underway across Libya, Algeria, Egypt and Morocco, North Africa is rapidly advancing as a natural gas powerhouse in the continent. Libya is ramping up gas production through projects like Structures A&E and Bouri Gas Utilization while Algeria targets a production rate of 200 billion cubic meters annually by 2027. Egypt is boosting output with a new licensing round and continued development of the Zohr field, while Morocco progresses with the Nigeria-Morocco Gas Pipeline to enhance regional supply. Meanwhile, in the international space, Saudi Arabia's growing engagement with Africa's gas sector is emerging as a central pillar of its broader energy diplomacy strategy, with the country strengthening bilateral and multilateral partnerships to unlock gas potential across the continent. As part of this push, Saudi Arabia has prioritized infrastructure development, upstream participation and downstream collaboration, positioning itself as a long-term partner in Africa's energy future. Saudi Arabia's state-owned Saudi Aramco is playing a key role in advancing Saudi-Africa gas cooperation, expanding its technical collaboration with African national oil companies to support gas monetization, exploration and production. The country has also integrated natural gas into its broader financial and development strategy for Africa, with a $41 billion funding package for sub-Saharan Africa set to promote gas-related projects as part of a wider drive to expand energy access and industrial capacity. 'International engagement in Africa's natural gas sector is fast-becoming a game-changer for the continent. By investing in infrastructure, exploration and production, regional and international players are strengthening Africa's position in the global energy market. This kind of strategic partnership is exactly what the continent needs to full monetize its natural gas potential,' states Ayuk. Distributed by APO Group on behalf of African Energy Chamber.
Zawya
5 hours ago
- Zawya
NBK-Egypt reports EGP4.1bln net profit in 1H2025
Al-Bahar: NBK Egypt delivered solid profit growth, underpinned by resilient operating performance amid challenging conditions The Bank continues to rank among the fastestgrowing financial institutions in Egypt, with a clearly defined and expanding presence in the local market Our financial indicators underscore the strength of our trajectory and affirm that we remain well positioned to further reinforce our market share Egypt remains a core strategic market contributing to the Group's growth El-Tayeb: NBK – Egypt continues to deliver strong performance, with solid growth across all key financial indicators The Bank remains focused on reinforcing its position in both the retail and corporate banking sectors We are fasttracking digital transformation by expanding our digital services Sustainable finance stands as a core strategic priority in line with our commitment to supporting environmentally responsible projects National Bank of Kuwait - Egypt (NBK-Egypt) has reported net profits of EGP 4.1 billion (Equivalent to KWD 25.65 million) for the first six months of 2025, a significant increase from the EGP 3.2 billion (Equivalent to KWD 24.9 million) reported in the corresponding period of 2024, showcasing an impressive growth rate of 30%. Net Operating Income stood at EGP 7.7 billion in 1H2025, recording a substantial increase of 28% from EGP 6.1 billion recorded in the corresponding period of 2024. In the meantime, Net Interest Income grew by 31%, reaching EGP 6.7 billion compared to EGP 5.2 billion in 1H2024. Meanwhile, Net Operating Income (excluding interests) increased to EGP 199 million in 1H2025, compared to EGP 147 million in 1H2024, up by 35%, while Cost to Net Operating Income grew by 1% in 1H2024 to 24% in 1H2025. Total assets reached EGP 206 billion by the end of 1H2025, up by 5% compared to EGP 196 billion by the end of 2024. Furthermore, total loans and credit facilities expanded to EGP 115 billion in 1H2025, reflecting a growth rate of 10% compared to EGP 104 billion recorded at the end of 2024. Additionally, customer deposits increased to EGP 166 billion by the end of 1H2025, up from EGP 160 billion at the end of 2024, representing a growth rate of 4%. The ratio of operating income to total net income increased to 87% as of 1H2025, compared to 85% in the corresponding period of 2024. Moreover, the Return on Average Assets (ROAA) improved to 4% in 1H2025, while the Return on Average Equity (ROAE) stood at 35%. Commenting on the financial results announced by NBK-Egypt, Ms. Shaikha Al-Bahar, Deputy Group Chief Executive Officer, National Bank of Kuwait, and Chairman of NBK-Egypt, said: 'The strong earnings growth achieved by NBK–Egypt in the first half of 2025 highlights the bank's solid financial standing and the enduring strength of its business model, which continues to generate sustainable profitability despite prevailing operational challenges. This performance stands as a testament to the Group's long-term strategic vision since its entry into the Egyptian market in 2007, reaffirming its confidence in the significant growth potential and strategic importance of one of the region's largest and most dynamic banking landscapes.' Al-Bahar affirmed that Egypt remains one of the Group's most prominent strategic markets, playing a role in driving growth, and is consistently regarded as its second home market. As the largest Kuwaiti investment in Egypt, NBK has established a clear and growing footprint within the Egyptian banking sector. The Bank ranks among the fastest-growing institutions in the market, a position reinforced by its robust financial indicators, which underscore its solid trajectory toward further expansion and enhanced market Al-Bahar emphasized that the Group views the Egyptian market as a long-term strategic investment and remains committed to expanding its presence. She noted that NBK's operations in Egypt continue to rank among the most profitable within the Group, consistently delivering high returns on equity and assets. Al-Bahar explained that the easing of geopolitical tensions in the region would significantly support the Egyptian economy and unlock greater investment opportunities. She also noted that the country's future outlook, continues to gain momentum from the ongoing reform efforts and the exceptional measures undertaken by the Egyptian government and the Central Bank of Egypt. Meanwhile, Vice Chairman, CEO, and Managing Director of National Bank of Kuwait-Egypt, Mr. Yasser El-Tayeb, said: 'The Bank's solid financial indicators in the first half of the year underscore its ability to sustain growth and deliver strong business results, despite the exceptional challenges facing the business environment on the local and global fronts due to ongoing political instability and its economic ramifications.' El-Tayeb emphasized that NBK–Egypt's growth remains well-balanced across all business lines, supported by efficiency and risk metrics aligned with both sustainable expansion and long-term resilience. He attributed this performance to the Bank's prudent policies and sound business model, which enable it to meet customer needs with agility and confidence. He added that the majority of NBK–Egypt's income is generated from credit operations, primarily through the corporate banking segment, while the retail banking sector has also witnessed notable growth in recent years. The Bank's credit portfolio spans a broad spectrum of clients, ranging from large corporations to medium and small enterprises, while its retail portfolio serves diverse customer segments. This breadth underscores the strength and diversification of NBK–Egypt's income sources. El-Tayeb emphasized the bank's commitment to further strengthening its position in the retail banking sector by offering advanced services and products tailored to diverse customer segments, aiming to establish itself as a comprehensive bank that fulfills all their financial needs. Furthermore, he also emphasized NBKE's firm belief in the pivotal role of technology and digital channels in shaping the future of the banking sector. Recognizing their importance in strengthening competitive advantage, NBK–Egypt has made substantial investments to upgrade its core banking systems and significantly expand its suite of digital services. These efforts are aimed at delivering a seamless and distinctive banking experience, enabling customers to carry out their transactions anytime, anywhere. In parallel, the Bank is committed to encouraging broader adoption of electronic payment methods, in alignment with the strategic direction of the Egyptian government and the Central Bank of Egypt. El-Tayeb emphasized that NBK–Egypt is committed to supporting the global shift toward sustainable finance and the transition to a green economy. The Bank actively backs environmentally responsible projects that promote sustainability and greater reliance on renewable energy sources. It also continues to explore viable solutions to mitigate the adverse impacts of climate change and reduce carbon emissions. Finally, El-Tayeb noted that sustainable finance has become one of the most critical instruments for promoting and preserving long-term financial stability. About the Bank: NBK-Egypt has a vast network of 52 branches spread over premium locations in various Egyptian governorates and cities, including Cairo, Giza, Alexandria, Delta, Red Sea, Port Said, Upper Egypt, and the industrial zones in 6th of October 10th of Ramadan cities. The Bank is also privileged to be among the elite banks within the Egyptian market that offer Islamic banking services in addition to its conventional products throughout its Islamic branches. Moreover, NBK-Egypt has a vast network of ATMs nationwide to service the Bank's clients around the clock. Furthermore, the bank offers a wide range of digital and electronic services, providing its customers with a unique banking experience. These services enable customers to conveniently conduct their banking transactions anytime and anywhere, eliminating the need to visit the bank for every transaction. National Bank of Kuwait (NBK) was incorporated in 1952 as the first local bank and the first shareholding company in Kuwait and the Gulf region. NBK continues to enjoy collectively one of the highest ratings among all banks in the Middle East from the three international rating agencies Moody's (A1), Standard and Poor's (A), and Fitch Ratings (A+). The Bank's ratings are supported by its strong financial indicators, asset quality, and high capitalization, in addition to its highly recognized and very stable management team, as well as strategic vision and stable funding base. NBK enjoys the most comprehensive banking presence with a local and international network with international presence in the world's leading financial centers including China, Geneva, London, Paris, New York, and Singapore, in addition to its regional presence in Egypt, Lebanon, Bahrain, Saudi Arabia, Iraq, and the UAE.
Zawya
6 hours ago
- Zawya
Nigeria's oil production topped 1.8mln barrels per day in July, regulator says
Nigeria's oil production surpassed 1.8 million barrels per day (bpd) last month, with current average output at 1.78 million bpd, Gbenga Komolafe, chief executive of the Nigerian Upstream Petroleum Regulatory Commission, said at a conference on Monday. The West African country, Africa's largest oil producer, relies on crude oil for nearly two-thirds of government revenue and over 80% of foreign currency earnings, making production gains critical for stabilising its economy. However, widespread oil theft and years of underinvestment have curtailed output and strained public finances in recent years. (Reporting by Isaac Anyaogu Bala-Gbogbo; Editing by Kirsten Donovan)
