Can Biden balance the green agenda with Africa’s energy needs?

By Julian Pecquet
Posted on Monday, 14 March 2022 09:25

U.S. President Biden and Commerce Secretary Raimondo hold a virtual meeting with business leaders and state governors, in Washington
U.S. President Joe Biden in Washington, U.S., March 9, 2022. REUTERS/Jonathan Ernst

Tensions between the Joe Biden administration’s climate agenda and Africa’s development needs hit the congressional scene last month when a conservative Republican denounced the “Left’s neocolonialist ‘green’ energy mindset.”

Channeling a frequent complaint of African leaders, Congressman Scott Perry offered language at an 8 February House Foreign Affairs Committee meeting stating that the shift to renewables “fails to serve the citizens of African nations.”

“It’s important for this committee to reckon with the disastrous environmental policies being imposed on African nations that simply want access to reliable electricity,” Perry said. He urged his colleagues to “hold the far left responsible for their regressive environmental policies in Africa.”

The nakedly partisan amendment to an unrelated resolution on Liberia’s bicentennial went nowhere. But it revealed the raging debate over how to transition to clean energy without mortgaging the developing world’s future.

Nowhere is that challenge more fraught than in Africa.

The continent has contributed least to global emissions but is the most at risk from a warming planet. It also suffers disproportionately from energy poverty, with more than 570 million sub-Saharan Africans accounting for 75% of the world’s population without access to electricity.

“We need to be serious about climate on a global scale. And we also need to ensure that we’re providing affordable energy for people as quickly as possible,” says Katie Auth, a former acting deputy coordinator with the US government’s Power Africa initiative and now a policy director at the nonprofit global network Energy for Growth Hub.

Threading the needle

The US government first made African energy access a priority nine years ago when President Barack Obama launched Power Africa, a multi-agency initiative to double access to power in sub-Saharan Africa. Back then new fossil fuel discoveries in Uganda and Mozambique were seen as a blessing.

“The recent discoveries of oil and gas in sub-Saharan Africa will play a critical role in defining the region’s prospects for economic growth and stability,” the White House said at the time.

Three years later, Congress passed authorizing language that explicitly called for a technologically neutral energy policy in Africa. The Electrify Africa Act makes it US policy to “promote an all-of-the-above energy development strategy for sub-Saharan Africa that includes the use of oil, natural gas, coal, hydroelectric, wind, solar, and geothermal power.”

Under President Donald Trump, the focus shifted to ensuring US energy dominance, notably in the natural gas market. Even then, Auth says, Power Africa was “very reactive to where the energy markets were going” and stayed out of coal projects.

“We were supporting where the investment was going and where companies were looking to focus,” she says. “And a lot of that was renewable, regardless of who the American president was.”

President Biden’s green rhetoric by contrast has caused plenty of hand-wringing on the continent, even as key details remain to be hammered out.

Nigeria’s vice president, Yemi Osinbajo, has argued against defunding gas projects in Africa. “For countries such as my own, Nigeria, which is rich in natural resources but still energy-poor, the transition must not come at the expense of affordable and reliable energy for people, cities and industry,” he wrote in Foreign Affairs.

Much of the concern centers around new restrictions on financing for fossil fuel projects, starting with the president’s 27 January executive order on “tackling the climate crisis at home and abroad.” The order calls on the US government to develop a climate finance plan for bilateral and multilateral lenders that promotes the flow of capital “toward climate-aligned investments and away from high-carbon investments.”

Subsequently, the Treasury Department in August issued guidance on international financing for fossil fuels at multilateral development banks.

The guidance says the US will oppose coal and oil projects, with limited exceptions for coal decommissioning projects and oil-based power generation to deal with crises or as back-up for off-grid energy “if no cleaner options are feasible.” It also offers “narrow support” for natural gas projects under very specific conditions.

That fall at the UN Climate Change Conference (COP26) in Glasgow, the US joined with European nations in pledging $8.5 bn to help accelerate coal-hungry South Africa’s transition to cleaner energy.

Finally in December, the State Department sent a 13-page diplomatic cable to US embassies around the world to help posts “calibrate international energy engagement posture.” The goal: “Ensure that the vast majority of U.S. international energy engagements promote clean energy, advance innovative technologies, boost U.S. cleantech competitiveness, and support net-zero transitions except in rare cases where there are compelling national security, geostrategic, or development/energy access benefits and no viable lower carbon alternatives.”

African blowback

Federal agencies are still working out how to integrate that guidance into their programming and decision-making.

“Part of the reason that it still feels nebulous is because each of the agencies is right now engaged in figuring out how to apply the administration’s overarching policy guidance,” Auth says.

The evolving policy has been met with dismay by some African political and business leaders who worry that green policies will hinder the development of a continent whose population is on track to double to 2.5 billion people by 2050. From the $6 bn African Renaissance pipeline project connecting Mozambique and South Africa to the 900-mile Tanzania-Uganda natural gas pipeline, Africa is looking to develop several major energy projects in 2022 that will require massive international investment.

“Africa can’t sacrifice its future prosperity for Western climate goals,” Ugandan President Yoweri Museveni wrote in a much-discussed Wall Street Journal op-ed ahead of the COP26 summit. “The continent should balance its energy mix, not rush straight toward renewables.”

Meanwhile the African Energy Chamber has launched an international lobbying campaign to keep financing flowing. In October it hosted its first African Energy Week in South Africa, billed as a global event that “elevates African voices on energy transition,” and plans to repeat the event this fall.

The 2021 event, largely ignored by the Biden team, attracted several Trump administration veterans in a sign of how politicized the issue has become. These include former US Interior Secretary Ryan Zinke and former Assistant Secretary of State for Energy Resources Frank Fannon, as well as Trump ally Erik Prince, founder of the private military company Blackwater. The Chamber is represented in the US by Robert Stryk, a 2016 Trump campaign volunteer.

“During this year’s edition …  an emphasis will be placed on finance, natural gas, electrification, hydrogen, upstream and a just transition as we believe these sectors have a specific role to play in Africa,” says Chamber Executive Director N.J. Ayuk. “By developing our gas resources, Africa can meet the growing demand for energy while reducing emissions.”

The Biden administration insists that it’s listening to those concerns. Last September climate envoy John Kerry dispatched his deputy, Jonathan Pershing, for a 10-day “listening tour” of the continent.

“This is more a chance to listen to people,” Pershing told The Africa Report at the time. “Part of the reason you visit is to try to avoid misunderstandings.”

Countering China

US energy policy is further complicated by competition with China, which has taken the lead on renewables and now builds three-quarters of the world’s solar panels.

At last month’s congressional meeting, Perry argued that the US should rethink its green push given Chinese dominance of renewable energy supply chains. His amendment referenced reports of President Biden’s son Hunter Biden’s involvement with China’s acquisition several years ago of one of the world’s largest deposits of cobalt, which is used in electric batteries, in the Democratic Republic of Congo.

Such allegations of corrupt US dealmaking regarding renewables don’t hold up to scrutiny.

In late January, the White House dispatched a trio of top officials – Deputy National Security Advisor Daleep Singh, White House senior director of Africa Dana Banks and Deputy Assistant Secretary of State for African Affairs Amy Holman – to the DRC to help the country “build diverse and resilient supply chains.” J. Peter Pham, the US special envoy to the Sahel under Trump, told The Africa Report they were there in part to help President Felix Tshisekedi’s government review its mining contracts with Chinese firms signed under his predecessor, Joseph Kabila.

“We’re at a stage where we’re looking at how to help the Congolese audit what has transpired before. Then they can make decisions about how they want to handle that,” says Pham, who is advising both the US and Congolese governments pro bono and helping Kinshasa select potential forensic auditors.

He said the goal is to eventually let African nations take over control of the processing of critical minerals, regardless of who digs them up.

“It’s a question of whether it couldn’t be done better, greener … and allow Congo to capture more of the value-chain by doing it in Congo, or certainly somewhere in Africa,” Pham says.

The Biden administration is also competing with China through clean energy investments. The US International Finance Corporation (DFC) for example recently announced a $500 m debt financing deal to help America’s largest solar manufacturer, First Solar, build a major photovoltaic panel manufacturing plant in India.

The US is also investing in solar projects in Africa, including Power Africa’s support for Namibia and Botswana’s collaboration on creating Southern Africa’s largest solar power program.

“Sometimes this debate over gas kind of ignores the fact that African countries are doing a lot of aggressive work to embrace renewables and scale renewables,” says Auth. “That tends to get lost in the conversation.”

At the same time, the DFC also continues to invest in fossil fuels when other options aren’t available. The agency last summer announced plans to provide $217 m in debt financing for a new 83 megawatt gas-powered plant in Sierra Leone, where just 23 % of people have access to electricity.

Auth called the announcement an “encouraging sign” that African energy needs won’t take a backseat to the Biden administration’s climate goals.

“On paper the US has come out in a good place,” she says. “The challenge is going to be whether they can actually implement that in a way that does actually ensure a continued focus on energy poverty.”

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