By Oliver Milman
The Guardian , November 1, 2022
Joe Biden will head to Egypt next week to tout America’s re-emergence as a leader on the climate crisis at the Cop27 talks. But he will be landing in a continent that the US continues to pour billions of dollars into for fossil fuel projects, with seemingly no end in sight despite the president’s promises.
The US government has funneled more than $9bn (£7.7bn) into oil and gas projects in Africa since it signed up to restrain global heating in the 2015 Paris climate agreement, a tally of official data shows, committing just $682m (£587m) to clean energy developments such as wind and solar over the same period.
Two-thirds of all the money the US has committed globally to fossil fuels in this time has been plowed into Africa, a continent rich in various minerals but also one in which 600 million people live without electricity and where floods, severe heatwaves and droughts are taking an increasingly devastating toll as the planet heats due to the combustion of coal, oil and gas.
Last year, the Biden administration ordered a halt to investments in “carbon-intensive fossil fuel-based energy projects” globally, promising to usher in a new era of renewables. But sources close to the main agencies involved said that there was no plan as yet to adhere to the president’s goal, risking further greenhouse gas emissions.
“I was thrilled with the promises from the Biden administration but over the last two years its been a slow walk back to the point where you couldn’t tell the difference between Biden and [Donald] Trump on overseas fossil fuel finance,” said Kate DeAngelis, international finance program manager at Friends of the Earth, who said it was “absurd” that wealthy oil companies were supported by US taxpayers.
“It’s been frustrating and tiresome to see so many opportunities lost to transition away from fossil fuels,” she said. “It’s just business as usual. We are seeing some of the most vulnerable communities in Africa be negatively impacted and they don’t have a voice.”
The Export-Import Bank of the United States (Exim) and the United States International Development Finance Corporation (DFC), the primary funders of overseas energy projects, have ramped up support of renewables in recent years but DeAngelis said DFC had shown no intention of ceasing fossil fuel funding. “They’ve said to us they will approve fossil fuels in Africa and beyond and not to get bogged down on that because they are doing renewables too,” she said. “It shows the lack of seriousness [with which] the Biden administration is taking this crisis.”
Exim is the official export credit agency of the US, established as an independent body by Congress in 1945 and tasked with bolstering American jobs by facilitating exports through financing that private lenders are unwilling to provide. Over the past decade, the agency has propped up coal mining in South Africa, oil drilling in Nigeria and is now supporting a vast gas project in Mozambique as part of a mission to “increase American exports across the continent”, as Reta Jo Lewis, Exim’s president, put it in September.
Exim has promised to spend an extra $650m (£560m) globally on renewable projects over the coming year but the agency is still considered to be institutionally fixated upon fossil fuel investment and is bound by statute to not explicitly favor one sector, such as wind or solar, over another, such as oil or gas.
From 2016 until last year, Exim’s financing of fossil fuels in Africa dwarfed renewable funding by a factor of 51 to one. This approach to lending threatens to undercut Biden’s message of climate leadership at what has been dubbed “Africa’s Cop”, to be held over the next two weeks in Egypt.
“It’s really important that there’s a complete alignment behind net-zero emissions in every instrument of government, so all agencies are working together to stimulate green growth,” said Rachel Kyte, dean of the Fletcher School at Tufts University and chair of Exim’s climate committee, although she did not speak on behalf of the agency.
“This is the most climate-knowledgable administration the US has ever seen but it is really hard to turn the ship around. We still see mixed messages to trading and investment partners.”
Seventeen of the 20 countries most vulnerable to climate change are found in Africa, with the continent requiring an infusion of funding to help it adapt to the economic and humanitarian challenge of repeated climate disasters. Africa is also home to about 60% of the most solar-rich environments in the world, according to the United Nations, although the west has so far been far less interested in harnessing the continent’s sun than its fossil fuels.
“A lot of countries in Africa are in a dilemma because they need industrialization but it will require investment that will take time,” said Youba Sokona, a climate scientist from Mali who is a vice-chair of the UN’s Intergovernmental Panel on Climate Change (IPCC).
Sokona said there was a “tremendous” opportunity to deploy solar-sourced electricity to shift communities away from practices such as cooking with charcoal but that such decisions were largely not being made by Africans themselves.
“Unfortunately this investment from the US is not feeding the development of Africa, it’s creating fossil fuels for export, this is the problem,” he said. “The US isn’t investing for the interest of Africans, it’s investing for the interests of the US. We need to reverse that situation.”
The billions of dollars in finance provided by Exim and the DFC, which in the past five years has spent $3.4bn (£2.9bn) bankrolling fossil projects such as oil facilities Guinea and Senegal and a gas pipeline in Egypt, has, however, been welcomed by some African governments as a way to raise living standards and capitalize upon resources previously plundered by western powers. It would be “unfair” to prevent Africa exploiting its gas reserves, Macky Sall, Senegal’s president, said in May.
This stance has been treated warily by climate campaigners and the Biden administration, however, with the International Energy Agency making clear that there can be no new fossil fuel development anywhere in the world if disastrous global heating is to be avoided. “We are not saying no gas,” John Kerry, Biden’s climate envoy, said last month following a meeting in Senegal with ministers from across Africa. “What we are saying is, over the next few years, gas replaces coal or replaces oil.”
Kerry has said that gas can act as a sort of transition fuel to renewables as it is relatively cleaner than coal or oil, although it does include the release of large amounts of methane, a short-term but potent greenhouse gas. In 2019, Exim made its biggest bet yet on gas, agreeing to provide a $4.7bn (£4bn) loan to finance a project in northern Mozambique overseen by Total, the French oil giant. A separate deal to provide several billion more, to Exxon for a parallel gas project in Mozambique, fell through in 2020.
’Communities have been left in limbo’
The Total project has been dogged by controversy, violence and the displacement of local people, mostly subsistence farmers, from their homelands on the coast of the Cabo Delgado province, an area bordering Tanzania that’s marked by pristine natural beauty – including the Quirimbas national park, a lush network of coastal forests, mangroves and coral reefs – as well as severe poverty.
Total started construction of a port facility near the town of Palma to process and ship out liquified natural gas drilled from off the Mozambique coast, only for operations to be suspended in April last year following a violent, unrelated offensive launched by al-Shabaab, an Islamic State-linked militant group, in the region. A restart is tentatively planned for next year.
Exim has trumpeted that more than 16,000 American jobs will flow from the project’s construction, even though it knew of the possibility of insurgent violence before making the loan, released documents have shown. The threat of conflict in the region “poses challenges to US peace, security, and development goals in the country” a congressional report from July found.
Map of south-western Africa, showing the Total offshore liquefied natural gas project in Mozambique.
Meanwhile, more than 550 families have been relocated from the community of Quitupo, situated in the planned project area. A new village was created further inland for the displaced people, although this area lacks the vital fishing and farming resources of the original community and the relocations have been paused following the attacks.
“Communities have been left in limbo,” said Daniel Ribeiro, a campaign coordinator at Justiça Ambiental, a Mozambique environmental group. “People in this region all say the situation is much worse now, there is a lot of anger and frustration. There were a lot of promises that this project will bring a lot of wealth but you often hear people saying they wish it never came here.”
Mozambique is one of the poorest countries in the world but Ribeiro said the push to exploit its deep reserves of gas is only likely to enrich members of the country’s elite and do nothing to bring electricity to the 70% of people who do not have it. Allegations of abuses by government forces in Cabo Delgado were passed on to Exim, Ribeiro said, although this hasn’t tempered the agency’s support for the project.
“It saddens me that the US continues to say pretty words but do bad things,” said Ribeiro. “Whenever there’s a conflict between making money and making a moral decision, we know what is going to win. That is where the US’s ability to produce beautiful narratives that hide the blood on their hands comes in.
“At least China doesn’t pretend that they are investing in Mozambique for any other reason than to make money. The US could at least be honest that this project will be terrible.”
Exim was approached for comment but did not respond. A spokeswoman for the US Development Finance Corporation said the agency was “committed to safeguarding US geostrategic interests, while accounting for rising energy demand and security around the world.
“DFC seeks to invest in highly developmental, affordable and sustainable energy access in alignment 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, wind, hydroelectricity and geothermal.