The African Energy Chamber (AEC) is proud to announce the participation of the African Energy Investment Corporation (AEICORP) at Africa’s leading investment platform for the oil and gas sector, African Energy Week (AEW) (AECWeek.com) , taking place on 18 – 21 October 2022 in Cape Town, South Africa.
AEICORP’s experience in financial advisory and capital raising, policy and technical assistance and project development will be vital at AEW 2022 as the conference moves to reshape dialogue around boosting oil and gas investments across Africa. Leading the AEICORP delegation, Director Zakaria Dosso will be participating in panel discussions and high-level meetings which center around the role fiscal and policy reforms play in helping Africa to attract investments within its high potential hydrocarbons market.
AEICORP was established in January 2019 by the African Petroleum Producers’ Organization in response to investment declines regarding oil and gas exploration and production. According to the AEC’s Q1 2022 Outlook, The State of African Energy, Africa’s oil and gas sector recorded a decline in capital expenditure from $60 billion in 2014 to $22.5 billion in 2020 due to factors such political instability, lack of adequate infrastructure and regulatory uncertainty. Additionally, the COVID-19 pandemic further reduced foreign direct investment (FDI) across Africa’s oil and gas sector with investors withdrawing up to $83 billion in investment from Africa in 2020, according to the International Monetary Fund, and oil companies delaying project rollouts.
In addition, new investment regulations which are driven by global climate policies have made it difficult for Africa to attract funding to boost oil and gas exploration and production. In 2021 alone, these policies saw west Africa’s oil and gas sector recording a 21% decline in FDI to $11 billion. As a result, Africa’s hydrocarbon production has also dropped. According to the United Nations Conference on Trade and Development, oil production across the continent has declined from representing over 12% of the globe’s total crude oil output at the end of the last decade to approximately 9% in 2022.
However, as Africa seeks to boost the production, utilization and monetization of its hydrocarbon resources, institutions like AEICORP are expected to play a vital role. Efforts by AEICORP to invest $7.65 billion, attract $12 billion in FDI and create over 800,000 jobs over a period of five years will play a significant role in helping Africa to address investment barriers.
Meanwhile as calls for Africa to introduce domestic financing solutions to address the increasing investment gap within the oil and gas sector increase, the participation of AEICORP at AEW 2022 will be critical in showcasing the role African institutions can play in boosting the continent’s hydrocarbons market. In this regard, AEICORP has been instrumental, working closely with institutions such as the African Export-Import Bank (Afreximbank) to improve African-sourced financing for oil and gas. In December 2020, the Afreximbank signed a framework agreement with AEICORP for collaboration on common interests, the coordination of various African initiatives and the fostering of sustainable capacity of African countries. Aimed at providing a solid plan to accelerate investment across the continent, the framework emphasizes the role African institutions and regional cooperation play in improving and creating financial solutions for Africa’s petroleum sector.
The AEC’s Q1 Outlook also states that capital expenditure across the continent’s oil and gas segment will increase to $30 billion in 2022 and continue to rise onwards, with Africa-tailored financial solutions expected to play an important role in making funding available to bring new projects such as the Mozambique’s Area 1 LNG project, Senegal and Mauritania’s Greater Tortue Ahemyim Floating LNG project, TotalEnergies’ Tilenga project in Uganda, Sonatrach’s AT (Isarene) project in Angola and Eni’s Quiluma/Maboqueiro project in Angola online.
“Investment trends we have witnessed over the past years have made us realize that Africa needs to develop its own financial solutions to fund the exploitation of hydrocarbons if we want to make energy poverty history by 2030. Jumping into using renewables alone will not help us secure energy supply and fuel industrial growth. Africa needs to prioritize the exploitation of oil and gas while diversifying the energy mix with renewables. Institutions such as AEICORP will help us get there,” states NJ Ayuk, Executive Chairman of the AEC.
Under the theme, ‘Exploring and Investing in Africa’s Energy Future while Driving an Enabling Environment,’ AEW 2022 will host AEICORP in investment forums to drive dialogue around how the continent can boost investments to maximize the exploitation and monetization of its significant oil and gas resources.