Despite climate goals, two-thirds of US fossil fuel funding goes to Africa | COP27

Joe Biden will travel to Egypt next week to promote America’s return as a leader in the climate crisis during the Cop27 talks. But he will land on a continent where the United States continues to spend billions on fossil fuel projects, and despite the president’s promises, there seems to be no end in sight.

Official figures show the US government has poured more than $9bn (£7.7bn) into oil and gas projects in Africa since the 2015 Paris climate accord was signed to limit global heating, with just $682m (£587m) to During the same period, the development of clean energy such as wind and solar energy.

During this time, two-thirds of all U.S. funding for fossil fuels worldwide went to Africa, a continent rich in various minerals but also a place where 600 million people have no electricity, where Floods, severe heatwaves and droughts often take their toll as the planet heats up from the burning of coal, oil and natural gas.

A chart of U.S. funding for energy projects in Africa, categorized by fossil fuels, clean energy, and other projects.
A chart of U.S. funding for energy projects in Africa, categorized by fossil fuels, clean energy, and other projects.

Last year, the Biden administration ordered a halt to investment in “carbon-intensive fossil fuel energy projects” around the world, promising to usher in a new era of renewable energy. But sources close to the major agencies involved said there were no plans to stick to the president’s goals, which could lead to further greenhouse gas emissions.

“I’m excited about the promise of a Biden administration, but over the past two years it’s slowly getting back to the point where you can’t tell the difference between a Biden and a Biden. [Donald] Friends of the Earth international finance program manager Kate DeAngelis said it was “ridiculous” for American taxpayers to support wealthy oil companies.

“It’s frustrating and tiresome to see so many opportunities to transition away from fossil fuels,” she said. “It’s just business as usual. We’re seeing some of Africa’s most vulnerable communities negatively impacted and they don’t have a voice.”

The U.S. Export-Import Bank (Exim), a major funder of overseas energy projects, has stepped up its support for renewable energy in recent years, but DeAngelis said the agency has no intention of stopping funding for fossil fuels. “They said to us that they would approve fossil fuels in Africa and beyond and would not be in trouble because they were also developing renewable energy,” she said. “It shows a lack of seriousness [with which] The Biden administration is dealing with this crisis. “

Exim, the official export credit agency of the United States, was established by Congress as an independent agency in 1945 with the mission of promoting U.S. jobs by promoting exports through financing that private lenders were reluctant to provide. Over the past decade, the agency has supported coal mining in South Africa, oil drilling in Nigeria, and is now supporting a major gas project in Mozambique as part of a mission to “increase U.S. exports across the continent,” as Reta Jo Lewis notes. Said the president of Exim, put it in September.

Exim has pledged to spend an additional $650m (£560m) on renewable energy projects globally over the next year, but the agency is still seen as institutionally focused on fossil fuel investments and is legally bound to not explicitly Support industries like wind or solar, over another, like oil or gas.

From 2016 to last year, Exim’s financing of fossil fuels in Africa dwarfed renewable energy financing by 51 to 1. The loan approach risks undermining Biden’s message of climate leadership in Egypt over the next two weeks, known as the “African Police.”

Rachel Kyte, Dean of the Fletcher School at Tufts University and Chair of Exim’s Climate Council, said: “It’s important to have full alignment to net-zero emissions across every government tool, so all institutions are working together to stimulate green growth.” Although she did not speak for the agency.

“This is the most climate-savvy administration the U.S. has ever seen, but it’s really hard to turn things around. We’re still seeing mixed messages to trade and investment partners.”

A graph comparing U.S. funding for energy projects in Africa with all international funding.
A graph comparing U.S. funding for energy projects in Africa with all international funding.

Of the 20 countries most vulnerable to climate change, 17 are in Africa, and the continent needs an infusion of funding to help it adapt to the economic and humanitarian challenges of recurring climate disasters. Africa is also home to about 60 percent of the world’s solar-rich environment, according to the United Nations, although so far the West has been far less interested in harnessing the continent’s solar energy than its fossil fuels.

“Many countries in Africa are in a dilemma because they need to industrialize, but it requires investment and it takes time,” said Youba Sokona, vice-chair of the UN’s Intergovernmental Panel on Climate Change and a climate scientist from Mali. Intergovernmental Panel on Climate Change).

Deploying solar power is a “huge” opportunity to move communities away from practices such as cooking with charcoal, Sokona said, but those decisions are largely not made by Africans themselves.

“Unfortunately, this investment from the U.S. has not boosted Africa’s development, it has created fossil fuels for export, and that’s the problem,” he said. “The United States is not investing in the interests of Africans, it is investing in the interests of the United States. We need to reverse that.”

Billions of dollars in financing from Exim and the US International Development Finance Corporation have spent $3.4 billion (£2.9 billion) over the past five years to finance oil facilities in Guinea and Senegal and fossil projects such as gas pipelines in Egypt, however, It has been welcomed by some African governments as a way of raising living standards and harnessing resources previously plundered by Western powers. Senegalese President McKisal said in May that it was “unfair” to prevent Africa from exploiting its natural gas reserves.

However, climate activists and the Biden administration are wary of the stance, with the IEA making it clear that new fossil fuels cannot be developed anywhere in the world if catastrophic global heating is to be avoided. “We’re not saying there’s no gas,” Biden’s climate envoy, John Kerry, said last month after a meeting in Senegal with ministers from across Africa. “What we’re saying is that in the next few years, natural gas will replace coal or oil.”

Kerry has said natural gas could serve as a transition fuel for renewable energy because it is relatively cleaner than coal or oil, although it does involve the release of large amounts of methane, a short-term but potent greenhouse gas. Exim made its biggest bet on gas in 2019, agreeing to provide a $4.7bn (£4bn) loan to finance a project in northern Mozambique overseen by French oil major Total. In 2020, another separate multibillion-dollar deal for ExxonMobil’s parallel natural gas project in Mozambique fell through.

‘Community in trouble’

The Total project has been plagued by controversy, violence and the displacement of local people, mainly subsistence farmers, from their homes on the coast of Cabo Delgado province, an area that borders Tanzania and is marked by pristine natural beauty – including the country of Quirimbas parks, a network of lush coastal forests, mangroves and coral reefs — and severe poverty.

Total started building a port facility near the town of Palma to process and transport LNG drilled off the coast of Mozambique, but the company suspended operations last April following an unrelated violent offensive by Al-Shabaab. Islamic State-linked militant group in the region. It is tentatively scheduled to restart next year.

Released documents show that Exim claims the construction of the project will provide more than 16,000 U.S. jobs, even though it knew of the potential for insurgent violence before it offered the loan. A congressional report in July found that the threat of conflict in the region “poses a challenge to U.S. peace, security and development goals in the country.”

A map of southwest Africa, showing the Total Offshore LNG project in Mozambique.
A map of southwest Africa, showing the Total Offshore LNG project in Mozambique.

Meanwhile, more than 550 households have been relocated from the Kitupo community located in the planned project area. Although the area lacks the vital fishing and agricultural resources of the original community, relocation has been suspended following the attack, but a new village has been established inland for the displaced.

“The community is in trouble,” said Daniel Ribeiro, campaign coordinator for Mozambican environmental group Justiça Ambiental. “People in the area are saying it’s worse now, there’s a lot of anger and frustration. There’s a lot of promises that this project will bring a lot of wealth, but you often hear people say they hope it never comes here.”

Mozambique is one of the poorest countries in the world, but Ribeiro said the push to tap its rich natural gas reserves would only enrich the country’s elite rather than provide electricity to the 70 percent of people who don’t have it. Ribeiro said allegations of abuse of power by government forces in Cabo Delgado were forwarded to Exim, although that did not dent the agency’s support for the project.

“It saddens me that America continues to say nice things and do bad things,” Ribeiro said. “Whenever there is a conflict between making money and making ethical decisions, we know what to win. That’s what America makes hidden in its hands. The power of blood’s beautiful narrative lies.

“At least China will not pretend that they are investing in Mozambique just to make money. The US can at least honestly say the project will be bad.”

Exim was contacted for comment but did not respond. A CDFC spokeswoman said the agency is “committed to safeguarding U.S. geostrategic interests while taking into account growing global energy needs and security concerns.

“The DFC seeks to invest in highly developed, affordable and sustainable energy sources consistent with the Biden-Harris administration’s long-term climate goals, including a net-zero future,” she said, adding that the agency has invested in solar energy, Wind, hydro and geothermal.

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