Published by Oil Change International, BankTrack, and Milieudefensie.
Our new report, “Locked Out of a Just Transition: Fossil Fuel Financing in Africa” reveals the scale of financial support provided by commercial banks, development finance institutions, and export credit agencies that flowed to the fossil fuel industry in West, Central, East, and Southern Africa between 2016 and June 2021. We identify at least $132 billion in lending and underwriting into 964 gas, oil and coal projects in West, East, Central and Southern Africa. The vast majority of this finance came from financial institutions based outside Africa, both commercial banks and public finance institutions like development banks and export credit agencies.
Endorsed by 350Africa.org, AFIEGO, Africa Coal Network, Alliance for Empowering Rural Communities (AERC), Alerte Congolaise pour l’Environnement et les Droits de l’Homme (ACEDH), Centre for Alternative Development, Environment Governance Institute (EGI), Friends of the Earth Ghana, Friends of the Earth Togo, Innovation for the Development and Protection of the Environment (IDPE), Justiça Ambiental!/Friends of the Earth Mozambique, Laudato Si’ Movement, Lumière Synergie pour le Developpement (LSD), Save Okavango (SOUL), Solidarité pour la Réflexion et Appui au Développement Communautaire (SORADEC), Synergie de Jeunes pour le Développement et les Droits Humains (SJDDH), Women Environmental Programme Nigeria, WoMin, Zimbabwe Environmental Law Association (ZELA).
Between 2016, following the adoption of the Paris Climate Agreement, and June 2021, public and private financial institutions poured at least $132 billion in lending and underwriting into 964 gas, oil and coal projects in West, East, Central and Southern Africa. The vast majority of this finance came from financial institutions based outside Africa, both commercial banks and public institutions such as development banks and export credit agencies.
- The majority of the largest fossil fuel financiers are from North America and Europe, in particular from the United States, the United Kingdom and France. JPMorgan Chase, Standard Chartered, and Barclays are all in the top 5.
- A staggering 28% of fossil fuel finance in the period ($37 billion) flowed from public finance institutions. Government backing and preferential rates mean this finance has an outsized impact on private financial flows, pushing forward fossil fuel projects and crowding out renewable alternatives.
- Financial institutions based in North America, Europe and Australia together provided $73 billion in financial support, 55% of the total. Asia-based financial institutions, mostly from China and Japan, provided $42 billion of the total amount, which equals 32%. In contrast, Africa-based financial institutions provided just $15 billion, or 11% of the finance.
Building on recent publications by African networks and civil society organizations (including The Sky’s Limit Africa), we emphasize that the injustices that have plagued the African continent for so long will persist without a Just Transition approach to renewable energy – an approach rooted in environmental, social, political, economic and gender justice. As such, the report puts forward eight Principles for a transformative Just Transition approach to renewables:
- A total and immediate ban on new fossil fuel projects and a managed but rapid phase-out of finance for existing fossil fuel projects and companies;
- Investment in knowledge and skills so African communities benefit from the continent’s huge renewable energy potential;
- Renewable energy that is people-owned and controlled, and is shaped around the notion of energy as a right;
- Renewable energy projects that respect democratic and participative decision-making and adhere to FPIC principles and ensure appropriate compensation and remuneration for affected communities;
- Making land rights central, in order to avoid repeating the injustices of the fossil fuel extractivism paradigm;
- The need for climate justice to be paired with gender justice, with women treated as important stakeholders within energy systems;
- Protection for the rights of workers in all aspects of the renewable energy system, including the right to freedom of association and collective bargaining, a living wage, and safe, secure and dignified work; and,
- The need for African ownership, including community ownership, of renewable energy, so profits generated from African renewables can directly benefit African people
A Just Transition leaves no room for fossil fuels. Public and private financial institutions must immediately stop financial support for new oil, gas and coal projects and phase out the existing support for fossil fuels. Instead, finance should be redirected to renewable energy sources, such as solar and wind energy. A Just Transition furthermore requires a shift of ownership of these renewable energy sources from large multinationals to African communities.