By Precious John
The US-Africa Committee of the African Energy Chamber held its first Meeting this week to discuss the future of energy cooperation and investments between the US and Africa post Covid-19.
The US-Africa Committee gathers top private and public industry experts and executives from both sides of the Atlantic, all committed to fully exploiting the potential of US-African energy cooperation. The meeting identified key areas and priorities to increase the level of capital and technology flows and address the challenge of accessing US capital markets.
Committee Members especially highlighted the challenge of raising capital for exploration and development projects in upstream oil & gas, coupled with a lack of understanding of Production Sharing Contracts (PSCs) mechanisms and structures. This challenge is now set to increase further given current market dynamics and conditions, and increasing lack of appetite for fossil fuels from traditional investors or lenders. Beyond just upstream, participants agreed that Africa offers the most attractive energy investment opportunities for American investors, stakeholders and entrepreneurs but the issue around messaging and perceptions of the continent continues to hinder investment.
In addressing perceptions of Africa in the US, participants highlighted the significant lack of adequate and objective messaging on African opportunities and African markets in the US. Addressing such issue of perceptions has been identified as a major priority for the Chamber and the Committee in order to properly communicate the opportunities of doing business in Africa as opposed to focusing solely on often exaggerated security and safety issues.
To unlock future growth potential in the US-African energy cooperation, Committee Members highlighted several issues and solutions. A key one pertains to expanded partnerships, with the need to increase engagement with a broader range of stakeholders, including public and private institutions, energy investors in North America seeking an interventional venture, and universities. More importantly, all agreed that the future of US-African energy cooperation will need to open up to SMEs and entrepreneurs and not be limited only to large and traditional corporations. The need to encourage African investments into the US was also brought to the table as a way to further support a win-win relationship that would support further capital flows going both ways.
Similarly, Environmental, Social and Governance (ESG) criteria and Know Your Customers (KYC) requirements were brought to the discussion as key factors African companies need to embrace to further attract US investment and technology. Such criteria and requirements should not be seen as obstacles for investments but as true enablers of successful joint-ventures and partnerships between US and African companies.
Membership of the Committee
The US-Africa Committee was appointed by the African Energy Chamber to serve on its Advisory Board in 2020 and 2021. Its members share a common belief that the US-Africa cooperation has the potential to transform Africa’s energy industry, and serve as advisors and transaction mentors to the Chamber and its network. Its members include:
- President, Kearney Africa, Jude Kearney
- Executive Chairman and CEO, Africa Fortesa Corporation, Rogers Beall
- CEO, Azimuth Energy Investments LLC, Reginal “Reg” Spiller
- General Manager – Africa, Pioneer Energy, Ann Norman
- CEO, Energy & Natural Resource Security, Inc. C. Derek Campbell
- CEO, Shoreline Energy International, Kola Karim
- Chairman and CEO, Genesis Energy Group, Akinwole Omoboriowo II
- Managing Director for Africa, Millennium Challenge Corporation, Alicia Robinson-Morgan
- Chief Economist, American Petroleum Institute, R. Dean Foreman
New Investment Committee to Provide Solutions to Finance Africa’s Energy Resurgence
The African Energy Chamber also announced the nomination of its Investment Advisory Committee, the last body to serve on its Advisory Board for 2020 and 2021. Its members include:
- Global Head, Client Relations, Afreximbank, René Awambeng
- Managing Director, EnergyInc Advisors and Senior Africa Advisor, IFU Danish Investment Fund, Rolake Akinkugbe-Filani,
- Former Oil Executive and Energy Consultant, Abongwa Ndumu
- Partner and Executive Director – Upstream, Cayo Energy LP, Robert Erlich
- Vice President – Africa, ION, Folarin Lajumoke
- Executive Chairman & Founder, Raise Africa Investments, Nosizwe Nokwe-Macamo
- CEO, Afara Solutions, Rachelle Yayi
Members of the Investment Committee serve in their personal capacity and gather a wide range of expertise in finance, legal and consulting. Together, they will play a key role in supporting the African Energy Chamber’s investment outreach initiatives.
With billions of dollars required every year to upgrade its energy infrastructure and fight energy poverty, the continent needs to successfully mobilize a wide variety of capital and financing. In doing so, African energy markets should be engaging with a broader range of capital providers, from traditional lenders to global institutional investors and private equity firms to venture capitalists. The energy resurgence of the continent following the Covid-19 will require all stakeholders to come together and find new ways to structuring deals and raising capital for the benefits of local economies and jobs creation.
“Our Investment Committee is central to the African Energy Chamber’s objective of providing a bridge between investors and the continent’s energy industry. Africa has limitless investment opportunities across energy sources and across value-chains, and there is a pressing need to communicate better with financiers and investors to increase investments in the continent,” stated Executive Chairman at the African Energy Chamber, NJ Ayuk. “The African Energy Chamber has made it its mission to boost capital and technology inflow on the continent, from engaging with new capital providers interested in Africa to advising on the structuring of better and future deals,” he concluded.
Landmark gas projects across Africa have managed to attract regional and global capital in recent months and years. From Senegal to Mozambique and Equatorial Guinea, Africa has demonstrated its ability to attract funding. However, investment is still falling short of market needs. While Nigeria’s ongoing Marginal Fields Bidding Round stands to be a success, access to financing the development of such fields will remain a key challenge for the operators. African Energy companies in Nigeria, Cameroon, Gabon, Ghana, Mozambique and South Sudan, Uganda and South Africa continue to see capital as their biggest obstacle when it comes to developing African natural resources or even competing for service contracts.
