Nigeria and other African countries pushing for energy transition with gas as a temporary option may face serious challenges in securing capital for power plants and gas infrastructure.
Although there are about $62 billion in planned power generation projects on the continent and another $89 billion in planned gas pipeline projects, translating to $151 billion, only $13.7 billion worth of the projects, translating to 9.07 per cent, is under construction, a new report by the Natural Resources Governance Institute said on Wednesday.
The report, which examined risk, renewable options, environmental concerns, energy security, and funding, noted the need for proper planning, especially looking at options depending on countries.
NGRI’s Tengi Gorge-Ikoli and Aaron Sayne noted in the report that as the world moves away from fossil fuels, pro-gas voices in and outside of government should explain to the public why gas is the best fuel to help their country reach its energy, economic, and climate goals.
The think tank said the countries should also make fast, equitable, inclusive plans for eventually moving different sectors (such as power and transport) away from gas while asking civil society actors, researchers, and the media to question the risks of continued investment in gas, and whether other alternative technologies could deliver similar—or better—outcomes.
With the different minuses and pluses of gas and renewables, the report noted that in circumstances where a country has significant gas reserves and already established domestic gas infrastructure, gas may prove to be a more feasible temporary option for countries.
It added that gas for power generation in that context could then arguably be a more reliable option, adding that as technological advancements are made to address the intermittency issues, renewables will become more competitive.
On the environmental issues, the report noted that while burning gas for electricity is not as polluting as fuels like coal or fuel oil, there is a need to halve the world’s gas consumption by 2050 to avoid the worst climate outcomes and meet the Paris Agreement goal of keeping global warming within 1.5 degrees Celsius of pre-industrial levels.
It stated that while voices from countries including Colombia, Ghana, Lebanon, Mexico, Nigeria, and Senegal are using the prospect of ending fossil fuel imports as a justification for boosting their own gas production and use, building the infrastructure may remain a mirage.
“There is not nearly enough investment capital to fund the new gas infrastructure some lower- and middle-income producers want to build. These countries cannot pay the large price tags themselves, and foreign investors are not willing to pay. This means that most planned projects are unlikely to move ahead,” the report noted.
The report noted that foreign funding for lower- and middle-income country gas projects is becoming elusive.
According to the report, only a handful of large commercial banks lend money for gas projects, stressing that interest from foreign private equity is scarce.
The post Nigeria, other African nations secure only $13.7bn of $150bn gas investment appeared first on Guardian Nigeria News.
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