Energy transition and renewable energy in Africa

The energy transition is a complex issue in Africa. Despite having contributed the least to fossil fuel emissions,^[1] it is African countries that may feel the impact of climate change the most.^[2] Moreover, many African states need to weigh up the benefits of transitioning to green energy sources against more immediate concerns relating to energy poverty: only 55.7 per cent of Africa’s 1.3 billion people have reliable access to electricity.^[3]

Nonetheless, renewable energy potentially provides a means by which African states can address both energy poverty and climate concerns and thereby solve the continent’s paradox of abundance and paucity, allowing for what is termed a ‘just’ transition. Africa is estimated to have 40 per cent of world’s total solar potential,^[4] and 60 per cent of the world’s best sources of solar (10TW), hydropower energy (35GW), wind (110GW) and geothermal energy (15GW).^[5]

Africa’s renewables potential is still, however, largely unrealised. In 2022, it contributed 2 per cent, 1 per cent and less than 0.5 per cent to the world’s capacity for solar photovoltaic (PV), onshore wind and green hydrogen,^[6] reflecting the fact that Africa has received just 2 per cent of global renewables investment over the past two decades,^[7] and only 0.6 per cent (or US$2.6 billion out of a worldwide US$434 billion) in 2021.^[8]

There are indications that this is changing. Total renewable capacity in Africa at the end of 2022 was around 30GW but is planned to increase to 150GW by 2030. Projections are that solar PV, onshore wind and hydrogen capacity will reach 70GW, 51GW and 50GW respectively by 2035.^[9] The trend is not only upwards but also one of increasing plurality. Of Africa’s renewable capacity in 2022, 75% derived from projects in Egypt and South Africa; however, capacity is predicted to increase to 80GW in the short term on account of new projects in Morocco, Algeria and Ethiopia, and to 150GW in the latter half of the decade owing, in part, to new large-scale projects in Mauritania and Namibia.^[10]

A fundamental issue that contributes to energy poverty in Africa and discourages renewables investment is inadequate electricity transmission and distribution infrastructure. Energy infrastructure in Africa has long-suffered from underinvestment: transmission networks attracted just 0.5 per cent of Africa’s total energy investment over the past decade.^[11] Power grid issues present material challenges, including unreliability, high loss rates, lower quality supply, restrictions on capacity (with limited scope for upgrade or expansion) and difficulties handling increasingly complex and variable electricity flows from renewable power, leading to lower revenues and cost recovery. Improving and modernising energy infrastructure is therefore critical: without transmission, there can be no transition.

However, there are positive signs of progress on that front. For example:

• Senegal is building around 1,350km of high and very high voltage electricity transmission lines, as well as eight extra-high voltage transformer stations;^[12]
• construction of the Kenya–Tanzania high-voltage transmission line, which is intended to link up to the Ethiopia–Kenya system and the Eastern Africa Electricity Highway, was completed in June 2023;^[13] and
• Morocco is planning to build a 1,600km high-voltage line linking its southern solar plants to proposed battery gigafactories in the north,^[14] while also installing the world’s longest subsea transmission cable connecting the United Kingdom directly to Moroccan wind and solar plants.^[15]
• Below are some of the African renewables projects that are either planned or due to come online in the near term (excluding projects in Morocco and Algeria, two world-leaders in solar power):
• Egypt, as part of its aim to produce 42 per cent of its electricity from renewable power by 2035,^[16] is building a 200MW solar PV plant in Kom Ombo, which is anticipated to start operating in early 2024.^[17] Egypt is also planning a 500MW wind farm near Ras Ghareb, which will power more than 800,000 Egyptian homes.^[18]
• Libya is launching a 500MW solar PV plant in Al-Sadda, 280km south-east of Tripoli, which is expected to generate nearly 152TWh of clean energy per year upon start-up in 2030.^[19]
• Togo is seeking to develop a 390MW solar PV power project, together with 200MWh of battery energy storage, which, if built, will be the largest grid-ready solar power plant in West Africa.^[20]
• Uganda, which issued its 2050 net zero Energy Transition Plan in December 2023,^[21] is building a 20MW solar PV power in its western region^[22] and is also planning a 150MW solar plant in the east, together with a new transmission line linking Mbale to Bulambuli.^[23]
• Tanzania is looking to develop a 300MW wind-powered plant in its southern region,^[24] as well as 100MW wind farm in Singida in the north.^[25]
• Ethiopia is building a 100MW wind farm in its central region, which will be capable of supplying 300,000KWh of electricity and powering 400,000 homes.^[26]
• Mauritania has ambitious plans to develop the AMAN project, which, if built, will comprise 8GW of wind capacity and 12GW of solar capacity, powering the production of up to 1.7 million tonnes of green hydrogen per year.^[27]
• Angola and Namibia also have bold hydrogen ambitions, which involve a 5GW renewables-powered hydrogen plant on the border of the two countries, at an estimated cost of US$10 billion.^[28]
• There are also ongoing feasibility studies regarding a mega-solar complex straddling the border between Botswana and Namibia, which, if built, will have a capacity of 5,000MW, making it one of the world’s largest solar plants.^[29]

As the energy transition in Africa ramps up, and concerted efforts are made to expand capacity across the continent through new renewable projects, there is likely to be a corresponding increase in disputes, anticipated to be primarily resolved through arbitration. The protean regulatory environment, the pace of development required, the variety and number of stakeholders, supply chain complexity and the deployment of new technologies within aging infrastructure all create fertile conditions for disputes.

Renewable projects are not the only potential source of disputes arising from the energy transition in Africa. In addition to an increased focus on resources, disputes may arise out of African states’ net-zero commitments. While, at the time of writing, at least 12 countries in Africa have put forward pledges to achieve 100 per cent renewable electricity generation before 2050, with three having self-declared compliance),^[30] all 54 African states have signed the Paris Agreement.[31] As more African countries embrace net-zero and introduce legislation to meet commitments, there may be an increase in claims by investors seeking to rely on treaty obligations that safeguard stable, equitable, favourable and transparent investment conditions.

It is possible that certain multilateral treaties, such as the 2003 Economic Community of West African States (ECOWAS) Energy Protocol, may in time face the same criticisms as those levelled at the Energy Charter Treaty because the protections it affords to investors in the ECOWAS area potentially limit member states’ ability to implement energy sector reforms to facilitate the energy transition. We may therefore see a surge in treaty claims under the ECOWAS Energy Protocol as African states struggle to balance maintaining an attractive investment environment with their climate change commitments.

Climate change initiatives in Africa

At COP 28, the 28th United Nations Climate Change Conference held in Dubai from 30 November 2023 to 13 December 2023, the participants reached what has been described as an historic agreement for ‘transitioning away from fossil fuels in energy systems, in a just, orderly and equitable manner, accelerating action in this critical decade, so as to achieve net zero by 2050’.^[32] Governments also agreed to triple global renewable energy capacity and double the rate of energy efficiency improvements by 2030.^[33]

As part of their undertakings, the participating states will have to submit their next round of climate action plans (ie, their nationally determined contributions (NDCs)), by 2025 for COP 30. The aim is that these NDCs will be aligned with the 1.5°C limit (adopted under the 2015 Paris Climate Agreement) based on the best available science and the outcomes of the 2023 global stocktake.^[34]

Although the above targets will be difficult to meet, and even more so for many African states whose economies are heavily dependent on fossil fuels, many African states have already launched initiatives aimed at achieving these objectives. For instance, 12 African states – including Burkina Faso, Chad, Ivory Coast, Ethiopia, Ghana, Kenya and Morocco – have joined the Coalition for High Ambition Multilevel Partnerships (CHAMP) for Climate Action. CHAMP aims to enhance cooperation in the planning, financing, implementation and monitoring of climate strategies, including NDCs, with a view towards collectively pursuing efforts to limit the temperature increase to 1.5°C above pre-industrial levels.^[35]

To meet the Paris Climate Agreement goals, the Financing Clean Energy in Africa report of the International Energy Agency (IEA), published in September 2023, indicates that, for the African continent to achieve the Sustainable Africa Scenario, ‘by 2030, energy investment needs to double to over USD 200 billion per year, in order for African countries to achieve all their energy-related development goals, including universal access to modern energy, while meeting in time and in full their nationally determined contributions’.^[36]

In the meantime, the UN Environment Programme’s Adaptation Gap Report 2023 underlined a significant shortfall of financing solutions to help developing countries reach these goals.^[37] Added to this is the fact that the sums allocated to the loss and damage fund, the financing of which was one of the main achievements of the COP 28, are still far from sufficient to cover the needs of the African continent.^[38]

As a result, African states, which include some of the most vulnerable countries to climate change, are in a situation where they must make commitments towards an energy transition without always having the means to ensure this transition. On the other hand, because of the continent’s very large metal reserves and its abundant clean energy resources, it is also well placed to take advantage of the opportunity created by the transition towards renewables and energy efficiency. It is expected that the growing need for these resources will foster job creation and accelerate investments.

In this context, the coming years will be crucial for African states that will have to make the necessary changes to benefit from the opportunity represented by the energy transition, while complying with the targets for phasing out fossil fuels, all without impacting their development needs.

The above will lead to major changes in the energy policies and regulations of African states, possibly including incentives for renewable energies, environmental impact assessments, obligations for new investments, stricter application of exchange control rules, increased reporting obligations, increased taxation and measures driven by resource nationalism, offset emissions obligations and obligations to refine and process materials within the continent instead of exporting them in their raw form. The measures that will be implemented by African states to address the energy transition will no doubt fuel disputes between investors and governments in the years to come. It is no secret that investor-state dispute settlement is regularly used to challenge regulatory changes, although the approach is sometimes criticised.^[39]

The Pan-African Investment Code (PAIC), adopted by the member states of the African Union in Nairobi in 2016, is an example of the direction that African states could take and the legislative and regulatory developments that may intensify in the future. Although only a non-binding model law, the PAIC is quite innovative because of its primary objective to ‘promote, facilitate and protect investments that foster the sustainable development of each Member State’.^[40]

Unlike most investment treaties, the PAIC deliberately omits the fair and equitable treatment standard, the interpretation of which is seen as uncertain. More importantly, it not only creates obligations for states but also includes direct obligations for investors in relation to corporate governance, sociopolitical obligations, bribery, corporate social responsibility, use of natural resources, business ethics and human rights. Investors shall, for instance, ‘contribute to the economic, social and environmental progress with a view to achieving sustainable development of the host State’ and ‘not exploit or use local natural resources to the detriment of the rights and interests of the host State’.^[41]

On 19 February 2023, the member states of the African Continental Free Trade Area Agreement (AfCFTA)^[42] adopted the Protocol to the Agreement Establishing the African Continental Free Trade Area on Investment (POI),^[43] which follows the path opened by the PAIC and includes detailed direct obligations for investors.^[44] In relation to climate change, investors shall, in particular, promote and facilitate investments ‘that support actions to mitigate greenhouse gas emissions and measures to adapt to the negative impacts of climate change’, that are ‘of relevance for a fair and just transition in sectors such as renewable energy, low-carbon technologies’ and ‘that mitigate climate change impacts on exhaustible natural resources such as fresh water and biological diversity’.^[45]

The POI prohibits the conclusion of any new bilateral investment treaty (BIT) between member states and is deemed to serve as a model for the conclusion of bilateral investment treaties between AfCFTA member states and third parties (ie, non-African states). One of the goals of the POI is to replace all BITs concluded between member states of the AfCFTA^[46] within five years of its entry into force.^[47]

Including direct obligations on investors in an investment treaty – not only regarding climate change but also more generally on environmental, social and governance issues – can be seen as a paradigm shift. It could lead to a broadening of the range of issues likely to give rise to disputes between investors and states. In particular, the changes could lead to an increase of counterclaims from states against investors.^[48] By adopting the POI, the African states have put themselves at the forefront of this trend in international law and in disputes between states and investors.

The Morocco–Nigeria BIT is also an example of the new constraints that investors could face in the years to come. Under the BIT, investors must conduct environmental and social impact assessments and shall not operate investments ‘in a manner that circumvents international environmental, labour and human rights obligations to which the host state and/or home state are Parties’.^[49] Future investment treaties could also include explicit obligations not to endanger the Paris Climate Agreement or COP 28 Agreement goals.

These new obligations may indicate a similar evolution for disputes and arbitration between investors and African states – an evolution that global agreements on climate change, such as the Paris Agreement and the COP 28 Agreement, are continuing to accelerate.

The years to come will tell us how these evolutions will be dealt with by arbitral tribunals, bearing in mind that new obligations should, in principle, only be enforceable in the future, as and when they are adopted and implemented by the African states. One complex issue, requiring assessment on a case-by-case basis, will be the compatibility between new obligations arising from the POI or similar investment norms and the provisions of existing international investment agreements or contracts (eg, concession agreements and production-sharing agreements) applicable to foreign investments. Several governments have already questioned the compatibility between the investment treaty regime and the Paris Climate Agreement goals owing to the constraints of international investment agreements on a host state’s ability to enact climate change regulations.^[50]

Resource nationalism and critical minerals

Any assessment of energy arbitration in Africa in 2024 would be incomplete without mention of a growing trend towards what is (sometimes controversially) referred to as ‘resource nationalism’. Resource nationalism is typically defined as a state’s assertion of control over the natural resources found within its sovereign territory. Although outright expropriation is one manifestation of resource nationalism, it more commonly occurs through indirect means, including post-investment changes to the legislative, fiscal or regulatory environment, non-renewal of existing contracts or the introduction of local content and participation requirements.

While resource nationalism is not a new phenomenon in Africa or elsewhere, recent events indicate a tendency towards increasing government interventionism across the continent. The reasons are invariably complex and differ from country to country; however, the issues currently contributing to, if not directly causing, the recent increase can be grouped into the following:

• political instability and civil unrest (eg, the overthrow of governments in Guinea, Mali, Burkina Faso, Niger and Gabon), leading to new populist or military leadership;
• the enduring economic impacts of the covid-19 pandemic and Russia’s invasion of Ukraine, including the effect of sanctions and retaliatory measures;
• inflationary pressures, commodity price volatility, global supply chain disruption and food insecurity;
• escalating competition for mineral resources, often indirectly caused by net zero commitments (eg, ‘battery metals’ such as cobalt, graphite and lithium) and partly driven by a desire in the West to counter China’s dominance; and
• domestic constraints on public service funding and demands for increased value from locally extracted resources.

It is often a combination of all these factors. Rapidly growing demand – driven by international concern over energy security and acceleration of the green transition – is causing an increase in prices, incentivising resource-rich countries to adopt measures aimed at bolstering public finances still reeling from the cumulative effect of the pandemic, the war in Ukraine and market volatility. While the reaction is perhaps understandable, the incentive is often perverse. If resource nationalism is mismanaged, foreign investment many be discouraged, which can itself further aggravate economic conditions and provoke a vicious cycle of further intervention.

The issue is by no means exclusive to Africa; its historical roots lie in the Middle East and Latin America, and the increase in resource competition has led to the introduction of policies in, among others, the United States (the Inflation Reduction Act), the European Union (the Critical Raw Materials Act)^[51] and the United Kingdom (the Critical Minerals Strategy).^[52] These policies, intended to enhance domestic production of critical minerals and protect international supply chains, are arguably in themselves a form of resource nationalism enacted by importing countries or regions without significant indigenous mineral wealth.^[53]

Taking the United Kingdom’s Critical Minerals Strategy as an example, the reason a strategy is needed at all is that the United Kingdom has ‘limited natural resources’ and ‘currently relies on complex and delicate global supply chains for its rapidly growing demand for critical minerals to fuel its net zero future’.^[54] As a result, to improve mineral supply chain resilience, the United Kingdom is planning to take steps to maximise domestic production and engage with emerging producer states (including those in the Commonwealth) to create opportunities for UK investors.^[55]

The United Kingdom and other states are, therefore, likely to be increasingly watchful of legislative changes in producer states (in particular for breaches of the World Trade Organization’s rules) and may, in time, promote their own domestic supply not only through subsidies and tax breaks but restrictions on foreign investment, the latter being a hallmark of resource nationalism. This is a step that Canada has already taken in its Critical Minerals Strategy, despite (or perhaps because of) its relative rare mineral affluence.^[56]

The world’s transition from fossil fuels to low-carbon energy sources, together with the development of energy storage technology, is driving an increased reliance on rare minerals. According to the IEA, mineral requirements for clean energy technologies are likely to double by 2040, or even quadruple if the Paris Agreement’s goals are to be fulfilled within that time frame.^[57] Lithium demand alone is likely to grow over fortyfold by 2040, while graphite, cobalt and nickel demand are predicted to grow between 20 and 25 times as much over the same period.^[58]

The consequence of intensifying global demand is a race for resources, exacerbating the tendency for mineral-rich countries to introduce protectionist measures when prices surge and the market is captive. Inevitably, that road leads to Africa, given its vast natural resources. Africa is reported to have approximately 30 per cent of the world’s mineral reserves,^[59] including 85 per cent of its manganese reserves, 80 per cent of its gold and platinum reserves, 21 per cent of its graphite reserves and 47 per cent of its cobalt reserves,^[60] and the proportion of global supply that derives from Africa is set to increase materially.^[61]

Recognising this, in December 2022, the Africa Development Bank (AfDB) put forward an ‘African Green Minerals Strategy’, aimed at harnessing opportunities provided by the low-carbon transition to maximise the benefits of extraction for the African continent and its people.[62] The AfDB suggested that African countries might achieve that aim by developing people and technological capabilities and building value chains to achieve resource-based industrialisation and thereby access wider international markets.

Some of the recent instances of resource nationalism in Africa appear intended to give effect to that strategy, as detailed below.

DRC

In August 2023, the Ministry of Mines of the Democratic Republic of the Congo (DRC) issued a decree forfeiting the rights of 29 companies to operate certain mines, including facilities that produce cobalt and copper, ostensibly on the basis of non-compliance with social and environmental commitments.^[63] The decree followed enactment of a new Mining Code in 2018, which imposed onerous terms on operators (including a 50 per cent tax on ‘windfall profits’), and partly explains why the DRC consistently ranks top of the resource nationalism risk index.^[64]

Treaty claims against the DRC are comparatively common, with two International Centre for Settlement of Investment Disputes arbitrations having been instituted in 2023 (one of which was by a lithium mining company),^[65] but it is possible that more will follow in the wake of the decree.

Guinea and Mali

In Guinea, the second-largest producer of bauxite globally, the government stopped work at the Simandou mine (the world’s largest untapped reserve of iron ore) pending agreement on commercial terms,^[66] including Guinea’s carried participation, and also issued new local content and tax regulations in 2023.

In Mali, the government enacted new mining legislation in September 2023 that, among other things:

• abolished certain tax exemptions;
• increased the interest that the government is entitled to acquire from 10 per cent to 20 per cent (on top of the carried state participation of 10 per cent and a further 5 per cent for Mali’s private sector investors);
• altered how participation acquired by the state is to be valued; and
• imposed additional local content obligations (eg, that all goods and services for mining operations must be sourced from Malian subcontractors, subject to certain exceptions).

Mali is no stranger to treaty arbitrations in the mining sector, with two having been commenced 2021 (although both are now concluded), and it is possible that these measures may lead to new claims.

Tanzania

In 2017 and 2018, the government introduced legislative reforms to its mining sector which, among other things, cancelled all retention licences and declared that the rights to all areas subject to the cancelled licences would immediately revert to the government. This precipitated a number of treaty arbitrations, some of which concluded in 2023, in which several investors, comprising nickel, gold and rare earth element mining companies, argued that the Tanzanian government’s actions amounted to unlawful expropriation.^[67]

Senegal

In Senegal, recent natural gas discoveries (viewed by European nations as a potential replacement to Russian supply) and a contested election have fostered an environment in which politicians are advocating for contract adjustments and more stringent local content requirements. Disagreement about the objective of the extractive industry in Senegal – whether the gas is intended for domestic use or export overseas – led one international oil company (IOC) to exit its investment in late 2023.^[68]

Zimbabwe, Namibia and Ghana

In December 2022, the government of Zimbabwe, which has the sixth largest lithium reserves in the world and the largest in Africa, prohibited raw lithium ore exports. This was swiftly followed by an immediate ban on export of all raw mineral ores in January 2023.^[69]

In June 2023, the Namibian government approved a ban on the export of unprocessed critical minerals, including lithium, cobalt, manganese and graphite,^[70] despite agreeing a deal to supply rare earth minerals to the European Union in October 2022.^[71] The stated aim of the measure was to increase the value extracted from native minerals before international export, thereby promoting domestic processing.

In August 2023, the Ghanaian government followed Zimbabwe’s and Namibia’s example and approved a policy banning the export of raw critical minerals ores, including lithium, bauxite and iron, insisting on a higher level of local participation in the green minerals value chain than its current 10 per cent vested interest.^[72]

Comment

These non-exhaustive examples, viewed in the context of the contributory pressures identified above and a continental strategy to exert more control over extractive industries, suggest that resource nationalism in Africa is on the rise and likely to manifest in increasingly diverse ways in the coming years.

Even the threat of protectionist measures can materially impact investment conditions, particularly as the decision to invest in a foreign country inevitably involves significant upfront cost (usually financed by debt) and long-term commitment. This longevity, often spanning several economic cycles (in which commodity prices may vary dramatically) makes these investments prone to contentious renegotiation. While the capital expenditure required usually makes investors more pragmatic than they might otherwise be, the more incentive there is to intervene, the more a state’s and its investors’ interests diverge and the more likely it is that disputes (invariably decided by arbitration) will arise.

The obvious protections on which investors can rely, aside from contractual provisions and political risk insurance, are the nearly 1,000 BITs that African states have signed (although only around 890 have been ratified). Changes to regulatory regimes, taxation and other fiscal measures, amendments to ownership requirements and outright expropriation are a mainstay of treaty claims. It is therefore likely, if resource competition continues its upwards trend in 2024 and beyond, that the number of commercial arbitrations and treaty claims involving African states will follow a similar pattern.

Foreign exchange control in the energy sector

 Foreign exchange control regulation represents a significant challenge in the relationship between emerging countries and investors in the energy sector.

African states often impose various forms of control over the purchase or sale of foreign currencies by residents, the purchase or sale of local currency by non-residents, and the transfer of any currency across national borders. This allows better management of a country’s economy by controlling the inflow and outflow of currency, therefore limiting the risk of speculation against the local currency. As such, foreign exchange controls can be used to either limit or encourage foreign investment, depending on the political and commercial agenda defined by the state.

Foreign exchange control comprises:

• control over the use of foreign currency within the country;
• control over the possession by locals of foreign currency;
• control over the opening of local and foreign accounts by locals in foreign currency;
• control over currency exchanges; and
• control over imports and exports of foreign currency.

Foreign exchange control is a current subject of considerable discussion in the context of the financing of energy projects and the foreign distribution of proceeds generated by local operations. The applicable regime can impact the structure of financing through the restrictions on the flow of money, conditions of reimbursement, opening of accounts and currency used. These can all have direct consequences on the bankability of an energy project.

In addition to being complex and sometimes ambiguously drafted, foreign exchange control regulations are in some cases not only based on national laws, but also on regional laws (eg, the rules of the Central African Economic and Monetary Community (CEMAC)^[73]). Because of the complexity of the rules and their intertwining nature, divergent interpretations often coexist for the same provisions.

Since they have instant consequences on the proceeds generated by an investment, any new or more stringent interpretation of exchange control rules is likely to immediately raise new challenges for foreign investments in the energy sector. They may also risk contradicting stabilisation provisions or individual authorisations that may have been given by a state to a project at the outset (eg, authorisations to open foreign accounts and repatriation limitations). It is, therefore, crucial for investors to monitor regulatory changes at both national and regional levels.

Foreign exchange control is a field with rapid and numerous developments. In recent months, several African states have amended their exchange regulations to encourage foreign investments. For example, new regulations entered into force in Morocco on 2 January 2024,^[74] Tanzania modified its recently adopted regulations through a new amendment,^[75] Angola adopted new rules applicable to the mining sector,^[76] and Tunisia will soon adopt a new foreign exchange code.^[77]

Current events in the CEMAC region illustrate how changes to foreign exchange control can represent major constraints for foreign investors. The entry into force on 1 March 2019 of CEMAC’s new foreign exchange regulation^[78] included more stringent rules and possible fines against operators and banks that fail to repatriate export earnings. This has led to major concerns among hydrocarbon and mining companies. After several years of discussion and a moratorium on the enforcement of said regulation, new regulations have been issued.^[79] As CEMAC regulations have precedence over local legislation of the CEMAC member states, these new regulations have created additional challenges for companies in the energy sector.

Discussions are ongoing between investors (mainly from the mining and oil and gas industries) and the Bank of Central African States (the central bank for the CEMAC region). The long-term consequences and potential disputes in relation to this matter are yet to be revealed.

This article was first published on Global Arbitration Review in April 2024; for further in-depth analysis, please visit GAR The Middle Eastern and African Arbitration Review 2024.

Footnotes

[1] Africa has nearly 20 per cent of the world’s population but has accounted for less than 3 per cent of its energy-related carbon emissions to date and has the lowest emissions per capita. See ‘Africa Energy Outlook 2022: Key findings’, International Energy Agency (IEA).

[2] The 10 most climate vulnerable countries globally are all in Africa. See ‘The Road to COP27: Making Africa’s Case in the Global Climate Debate’, Mo Ibrahim Foundation (July 2022) (Mo Ibrahim Foundation report), p. 46.

[3] ibid, p. 40.

[4] ibid, p. 46.

[5] ‘Africa’s energy outlook: Renewables as the pathway to energy prosperity’, Deloitte (Oct 2023).

[6] ‘The State of African Energy: 2023 Outlook’, African Energy Chamber (African Energy Chamber report), p. 9.

[7] The African Leaders Nairobi Declaration on Climate Change and Call to Action, section 14.

[8] ‘Africa’s Energy Future Is Renewable’, RES4Africa Foundation (15 June 2023) (RES4Africa report), p. 4.

[9] African Energy Chamber report, p. 9.

[10] ibid, p. 64.

[11] RES4Africa report, p. 13.

[12] Jean Marie Takouleu, ‘Electricity transmission: France’s Vinci wins a €200 million contract in Senegal’, Afrik 21 (17 Jan 2024).

[13] ‘Kenya, Tanzania electricity line to be launched this year’, The EastAfrican (21 June 2023).

[14] John Hamilton, ‘Morocco eyes line to send southern wind power to north’s gigafactories’, African Energy (6 Nov 2023).

[15] ‘Britain backs undersea cable to tap Moroccan renewable power’, Reuters (29 Sept 2023).

[16] Anna Ivanova, ‘Egypt targets 42% renewables by 2030’, Renewables Now (8 Nov 2021).

[17] ‘Kom Ombo Solar PV Plant, Egypt’, Power Technology (19 May 2023).

[18] Press release, ‘500 MW Gulf of Suez 2 Wind Farm Project Achieves a Major Milestone in Egypt’, Orascom (3 Apr 2023).

[19] Anu Bhambhani, ‘GECOL Officially Launches 500 MW Solar Power Plant; To Be Built By TotalEnergies’, TaiyangNews (17 June 2022).

[20] ‘PIA Solar Park’, PIA Togo.

[21] ‘Uganda sets out new net zero energy plan to meet key economic, social and climate goals’, IEA (5 Dec 2023).

[22] ‘Power plant profile: Amea West Nile Solar PV Park, Uganda’, Power Technology (31 Jan 2024).

[23] Kenneth Kazibwe, ‘Uganda: COP28 - Uganda Inks Deal for 105MW Solar Energy Plant’, allAfrica (5 Dec 2023).

[24] ‘Miombo Hewani Wind Farm, Tanzania’, Power Technology (8 Dec 2021).

[25] ‘Tanzania Singida Wind Power Project’, World Bank Group.

[26] ‘Assela I Wind Power Project’, NS Energy.

[27] Martina Markosyan, ‘CWP reports progress on 30-GW green H2 project in Mauritania’, Renewables Now (23 Nov 2023).

[28] Arnes Biogradlija, ‘Angola-Namibia green hydrogen project goes to 5GW’, EnergyNews.biz (1 Feb 2022).

[29] ‘Namibia, Botswana to build 5,000-MW solar project’, CGTNAfrica (16 June 2023).

[30] ‘Who Decides Africa’s Net Zero Pathways?’, Energy for Growth Hub (Oct 2022). See also the Net Zero Tracker website.

[31] ‘Africa NDC Hub’, African Development Bank (AfDB).

[32] ‘Outcome of the first global stocktake’, FCCC/PA/CMA/2023/L17, Draft decision CMA.5 (13 Dec 2023).

[33] ‘COP28’, European Council.

[34] ‘COP 28: What Was Achieved and What Happens Next?’, United Nations Framework Convention on Climate Change.

[35] ‘Coalition for High Ambition Multilevel Partnerships (Champ) for Climate Action’, COP28.com.

[36] ‘Financing Clean Energy in Africa’, IEA (revised Nov 2023), p. 154.

[37] ‘Adaptation Gap Report 2023’, UN Environment Programme

[38] ‘African Economic Outlook 2022’, AfDB (25 May 2022).

[39] ‘Investor claimants brought at least 175 IIA-based ISDS cases in relation to measures taken for the protection of the environment’ between 1987 and 2021. See ‘International Investment in Climate Change Mitigation and Adaptation: Trends and Policy Developments’, United Nations Conference on Trade and Development (UNCTAD) (2022), pp. 23 to 24.

[40] Pan African Investment Code (PAIC), article 1.

[41] PAIC, articles 22.3 and 23.

[42] The African Continental Free Trade Area Agreement (AfCFTA) entered into force in May 2019 is the largest free trade area since the formation of the World Trade Organization. Out of the 55 African Union member states, 54 have signed the agreement establishing the AfCFTA (only Eritrea did not sign).

[43] The Protocol to the Agreement Establishing the African Continental Free Trade Area on Investment (POI) was adopted under a draft format and is still subject to ratification and implementation by the member states.

[44] The PAIC is seen as a precursor of the POI and referenced in the preamble of the POI.

[45] POI, article 26.

[46] According to UNCTAD, there are currently 208 bilateral investment treaties and multilateral treaties with investment provisions signed or in force between African states.

[47] POI, article 49.

[48] Maxi Scherer and Clara Reichenbach, ‘Chapter 5: Climate-related counterclaims in international investment arbitration’, in Annette Magnusson and Anja Ipp (eds), Investment Arbitration and Climate Change, Kluwer Law international (2023), pp. 105 to 138.

[49] Reciprocal Investment Promotion and Protection Agreement Between the Government of the Kingdom of Morocco and the Government of the Federal Republic of Nigeria, articles 14 and 18(4).

[50] Paul Barker and Marisa Martin, ‘Chapter 2: Carbon Markets, Emissions Trading, and Investor-State Disputes’, in Annette Magnusson and Anja Ipp (eds), Investment Arbitration and Climate Change, Kluwer Law international (2023), pp. 43 to 62

[51] The European Union issued the Critical Raw Materials Act at the same time as the Net Zero Industry Act, intended to ‘scale up the EU manufacture of key carbon neutral or “net-zero” technologies to ensure secure, sustainable and competitive supply chains for clean energy in view of reaching the EU’s climate and energy ambitions’. See press release, ‘Critical Raw Materials: ensuring secure and sustainable supply chains for EU’s green and digital future’, European Commission (16 Mar 2023).

[52] ‘Resilience for the Future: The United Kingdom’s Critical Minerals Strategy’, HM Government (2022).

[53] As Lord Mark Sedwill, the UK Envoy for Economic Resilience and chair of the G7 Panel on Economic Resilience, observed in 2022, ‘critical minerals, semiconductors, and data are the oil, steel, and electricity of the 21st century’ (summary report, ‘Future-Proofing the Supply of Critical Minerals for Net-Zero Emissions’, (Jan 2022), p. 2).

[54] ‘Resilience for the Future’, HM Government, pp. 7 and 14.

[55] ibid, p. 32.

[56] ‘The Canadian Critical Minerals Strategy’, Government of Canada.

[57] Executive summary, ‘In the transition to clean energy, critical minerals bring new challenges to energy security’, IEA.

[58] ibid. Lithium prices increased nearly 400 per cent year-on-year in May 2022, although the price has since slipped.

[59] Mo Ibrahim Foundation report, p. 67.

[60] Gracelin Baskaran, ‘Prospects for U.S. Minerals Engagement with Africa’, Center for Strategic and International Studies (29 Aug 2023).

[61] ‘Africa’s critical mineral production poised for rapid growth’, Benchmark Source (5 July 2023). It is forecast that, by 2030, Africa will have a 69 per cent share of the global cobalt market, 39 per cent of the graphite market and 12 per cent of the lithium market.

[62] ‘Approach Paper towards preparation of an African Green Minerals Strategy’, AfDB (Dec 2022).

[63] Tom Collins, ‘DRC mining licence suspensions damage investor confidence’, African Business (7 Sept 2023).

[64] ‘Resource nationalism rises in 30 countries: DRC joint highest risk with Venezuela’, Maplecroft (21 Mar 2019).

[65] Afriland First Group SA and others v Democratic Republic of the Congo, ICSID Case No. ARB/23/38; AVZ International Pty Ltd, Dathcom Mining SA and Green Lithium Holdings Pte Ltd v Democratic Republic of the Congo, ICSID Case No. ARB/23/20.

[66] Saliou Samb, ‘Guinea orders Simandou iron ore project works to stop’, Reuters (4 July 2022).

[67] Winshear Gold Corp v United Republic of Tanzania, ICSID Case No. ARB/20/25; Nachingwea UK Limited, Ntaka Nickel Holdings Limited and Nachingwea Nickel Limited v United Republic of Tanzania, ICSID Case No. ARB/20/38; Montero Mining and Exploration Ltd v United Republic of Tanzania, ICSID Case No. ARB/21/6.

[68] Katarina Hoije, ‘BP Exits Gas Field in Senegal After Disagreement Over Exports’, Bloomberg (25 Nov 2023).

[69] Isabeau van Halm, ‘Zimbabwe joins the wave of resource nationalism’, Mining Technology (19 Jan 2023).

[70] ‘Namibia bans export of unprocessed critical minerals’, Reuters (8 June 2023).

[71] ‘Namibia, EU reach provisional deal on rare earth minerals’, Reuters (21 Oct 2022).

[72] Ekow Dontoh, ‘Ghana Approves Green Minerals Policy to Develop Lithium Industry’, Bloomberg (7 Aug 2023).

[73] An economic community comprised of Cameroon, the Central African Republic, the Republic of the Congo, Gabon, Equatorial Guinea and Chad.

[74] Press release, ‘Publication de l’Instruction Générale des Opérations de Change 2024’, Office des Changes.

[75] Mohammedzameen Nazarali and Charles Mmasi, ‘Tanzania: Amendment to the Foreign Exchange Regulations’, Bowmans (11 Sept 2023).

[76] Notice, ‘New foreign exchange rules applicable to the mining sector’, Morais Leitão Legal Circle (27 Feb 2023).

[77] ‘La Kasbah : Le nouveau code des changes bientôt présenté en Conseil des ministres’, LaPresse.tn (27 Feb 2024)

[78] Regulation No. 02/18/CEMAC/UMAC/CM.

[79] Regulations Nos. 01/21/CEMAC/UMAC/CM and 02/21/CEMAC/UMAC/CM.