Africa Can Create Next Level Infrastructure by Working With Russia, Energy Chamber Head Says

NJ Ayuk, executive chairman of the African Energy Chamber and CEO of pan-African corporate law conglomerate Centurion Law Group, who is participating in the Russian Energy Week, talked to Sputnik, explaining the nature of the current energy crisis and weighing in on the prospects of Russian business in Africa.

NJ Ayuk: I think it provides an opportunity for Africa, and a big opportunity for Africa to expand its partnerships and really take a big partner in seeing what it can do with Russia. I'll give you an example. Russians have been some of the top experts when it comes to building gas pipelines. And so right now it is an opportunity to see how are you looking at doing it: connecting Africa or African energy infrastructure, to look at gas pipelines that can drive Africa to the next level?

So, you take gas, Russian technologies, those opportunities and knowhow and skill set and really drive that. A second aspect of it is that you've got to also pay attention to a clean energy transition.

So, you build pipelines for gas, but you also build pipelines that could be converted and used in being able to transport hydrogen. So, whether it is green hydrogen or blue hydrogen, you are able to do that and you move that. But most importantly, the ability to monetize gas, to look at urea, ammonia, NPK, fertilizer plants to drive home-grown productivity that Africans really need, and then useful because you can do for yourself instead of expecting others to do that for you. So, these gas byproducts would really be able to really drive that. And so, you have to look at those who've been able to transform their economies over a 30 to 40-year period of what the Russians have been able to do and take that skill set.

Now, it's going to take a concerted effort. You're going to have to improve your environment to do business and make it even better to make it attractive. Because at the end of the day, Russian capital or Russian technology is going to go to where it is embraced, where it is welcome and where it is conducive for it to do that business. So, Africans, we have some work to do and this is a key moment that we need to grab this opportunity, do the things that we want to do and be like what Gandhi says, "be the change that you want to see."

NJ Ayuk: I think it's going to be gas. Gas. Gas. Gas. Because there is abundant gas in Africa. Abundant gas.

NJ Ayuk: There is no infrastructure in developing those gas resources. Whether it is gas for power, or different kinds of gas for liquids or looking at getting gas into different kinds of things like petrochemicals.

But you need to just be on gas. But bigger than that, you've got to look at the potential around hydro, a massive hydro potential that would really provide cheap and affordable power for a lot of places. But gas continues to be attractive because of heavy industries. And these heavy industries like cement and all of that, when you have gas, then you are able to really take care of these heavy industries, because we still need to industrialize.

We still need to drive up industrialization across the continent. And if you're going to drive industrialization, you have to bring in heavy electricity and heavy power. I mean, solar and renewables have got potential, but these technologies are not fully developed. And the intermittent nature of it, it's an addition. So, look, solar and wind is kind of like the icing on the cake. You know, it's like you have that nice, very nice dessert and then you put a little bit of icing on top and you say, this is fancy and this is luxurious. And let it go. But you need that heavy base load.

Right now, you are getting some from coal and you're getting some from diesel. But when you want to make it cleaner, then you have to start looking at the issues around it: carbon capture to clean that coal or face down coal, but then develop gas, which is the cleanest form of fossil fuels. And then gas could still replace that. It can really power heavy industries and drive that. If you do that, then you have no problems.

NJ Ayuk: I think it's like what I said, Africans want to get married. They need full engagement from Russians. I think Africans are a little bit tired of a lot of, a lot of MOUs have been signed, but they've not been followed up, and a lot of broken promises. Sometimes we have to be honest with this relationship.

NJ Ayuk: We have some current projects that have been on course, but we need to go into super drive [mode]. We need to actually accomplish them, beyond just things around security and stuff like that. But we need to really look at some of these energy projects and see. Russians have done a lot of MoUs. This is time to go back into the room, dust off those MoUs and implement them immediately. Start getting in force in maybe drilling. Like memoranda of understanding. Those agreements need to be turned around.

NJ Ayuk: Into actions, implement them right now. So, get gas projects moving. Get pipeline projects moving, get power projects moving. Whether it is hydro, or wind or even solar. We need a big energy mix - that is the key for Africa. But I think it's really important for everyday Africans to see clear projects in place. When they see that, then they are comfortable, then they get their renewed trust and continue to pursue.

So, we have to show them results. And this is really the key right now because people continue to be skeptical of everything. Africans don't just want to see these and say, "okay, they're coming to us right now because there is a crisis in Europe." They want to see that this is a real commitment to drive this relationship into the future. If we do that, then it works well.

NJ Ayuk: That's why we need to have policies that domesticate the investment. So, for example, you could still keep energy financially beneficial by creating an African gas market, an African index. So right now, for example, we trade our gas with the Dutch Index or the Asian Index or the one out of the United States. We need to be able to recreate that. And so that you say there is a market here. If you for example, as a European or a Russian or an American company, you invest in Africa and you create a power plan, you'll be able to do agreements, and power purchase agreements have to be that you can still recover your money, get benefits, be able to transfer your money.

So, you become competitive. Because at the end of the day, it's capital. But we need to ensure that the African market is competitive. If we continue to hold back and send the wrong message, then it scares off investors. We should not do that, but we should be able to ensure that Africans today need that energy and the market is there. When you have 600 million people without energy, you imagine if you were able to provide energy to them, you would be able to make money because we've already advanced on how to pay for that energy with like mobile money payments and it's fast.

And it was the same thing people said about cell phones – “Don't do cell phones in Africa because they won't be able to pay”. Now, you’ve got a lot of people today with two cell phones, and they’re working with it. So, we need to be innovative and we need to be forward thinking.

NJ Ayuk: We have to be careful about, number one, aid. When you cut this “free money”, it comes with strings attached, because a lot of the aid that's been provided to Africa - they come and they tell you, “don't develop your gas resources, don't develop your oil resources as part of the aid that you get,” and that is a problem. So, part of what we at the African Energy Chamber, we are against aid. We think that aid has not really helped us because it comes with strings. And these conditions have not been in the best interests of the continent. It's been in the best interests of those that are giving aid to us.

We think if you have more trade, more commerce, more business, then you are in a better position to say you can invest in this gas. Here is your part. Here is my part. What I do with my money is none of your business. And what you do with your money is none of my business. But also, I want to see that my people use some of the gas to develop the gas market internally. Because we need to grow and we need to make sure that that works. If we can do that, then it makes a lot of sense for a lot of African countries like Mozambique that have abundant gas resources that need to be developed right now.

NJ Ayuk: Absolutely. We need to form the fiscal procedures that would work.