Control Risks on Africa's role in the global energy transition

Africa's potential in the global energy transition is gaining momentum as the continent seeks to shift towards a more sustainable and climate-friendly power strategy. Patricia Rodrigues, the senior analyst for West Africa at Control Risks, shed light on the opportunities and challenges that African countries face as they navigate this transition. The Africa Risk Award Index, published annually by Control Risks, tracks the investment landscape in major African economies. This year, amidst a global economic downturn, countries like Senegal, Angola, and the DRC have emerged as top performers, driven by their oil, gas, and commodity industries. On the risk side, Cote d'Ivoire has shown promise due to political efforts towards national reconciliation. Despite facing risks, Africa is poised to play a significant role in the global energy transition. The continent has seen a resurgence of interest in various energy sources, including renewables like solar, hydrogen, and hydropower. African countries have the opportunity to leapfrog traditional fossil fuel technologies and position themselves as key players in the green energy space. Moreover, with valuable mineral resources, especially in countries like the DRC, Africa is attracting attention for its potential contribution to the green transition. Egypt's hosting of COP27 further exemplifies the continent's increasing relevance in global energy discussions. However, challenges abound, particularly in political and economic spheres. Political instability, marked by transitions, elections, and security concerns, poses risks to energy investments. Economic challenges such as public debt burdens and non-payment risks also deter investors. To unlock Africa's energy potential, investors must understand the local context and engage in partnerships with governments and local stakeholders. Creating an enabling environment with investor-friendly policies is crucial for attracting sustainable investments. Collaboration between the public and private sectors is essential, with a focus on financing infrastructure and improving the ease of doing business. In addition to financial support, there is a need for patient capital to nurture long-term energy projects and infrastructure development. While the road to a sustainable energy future in Africa may be fraught with challenges, the continent's diverse opportunities and potential for innovation make it a promising player in the global energy transition.