Ready, Set, Renegotiate! Senegal Reassesses Its Mining and Petroleum Contracts
Since the election of President Bassirou Diomaye Faye in March 2024, Senegal has embarked on a strategic shift by announcing its intention to renegotiate key contracts—including those signed with multinational companies in the mining, oil and gas sectors.
Since Faye’s inauguration, the government’s decision to renegotiate oil and gas contracts has evolved from an electoral promise to an active process, with the establishment this month of a special commission for the review of strategic contracts and the announcement of a sectoral audit. This reflects the new leadership’s commitment to a more transparent and effective management of natural resources.
This is not unheard of. Changes in political regime have triggered renegotiations in several countries, such as Bolivia in 2006, Liberia and Sierra Leone in 2008, and Guinea in 2011.
The success of the review and renegotiation process will depend on various legal, economic and political factors. The announcement of the review commission suggests the start of a contract review phase, allowing the government to decide whether to renegotiate and on which points. If this two-step approach is adopted, it is essential to continue rigorously assessing the potential costs and benefits.
Now is a tricky time to consider renegotiation, as several extractive projects in Senegal are entering production. Perceptions around European demand for Senegalese gas amid supply disruptions related to the Ukraine conflict, the impact of the energy transition, and the recent disengagement of companies like BP add a layer of complexity.
If renegotiations are transparent and well-managed, it could maximize long-term benefits for the state, while an opaque process could damage relations with partners, discourage future investments, and undermine citizens’ trust in the governance of their natural resources.
In this context, international experience offers several best practices. Pending specific guidance from the authorities, in this post we share five recommendations that officials and members of the renegotiation committee should consider to ensure success.
1. Build consensus on the objectives and roadmap of the process
Renegotiating extractive contracts carries risks. First, it is crucial to set realistic and achievable objectives based on a cost-benefit analysis with a clear scope. Clear objectives, covering areas such as taxation, local content, or environmental management, can limit political interference and use of discretionary power.
However, achieving consensus remains complex, as government priorities may differ in a given context. To frame the renegotiations, the government must provide the negotiation team with clear terms of reference, specifying the scope of renegotiation, and minimum requirements, particularly on specific points such as transparency, anticorruption, transfers of mining interests, taxation, environmental protection, risk management, and relations with local communities. A well-defined agreement model prepared in advance can help maintain consensus and ensure legal compliance.
The 2019 Petroleum Code allowed for the government and companies to agree to amend contracts, within 24 months of the code’s entry into force, to bring them into conformity with the new code. However, most contracts are still governed by the 1998 code. Negotiators could aim to align these contracts with current legislation while overcoming the challenges of stabilization clauses and previous attempts at compliance in 2019. In summary, the authorities should demand that companies “do their homework” before fully committing to the process.
2. Establish an effective and transparent communication strategy
In Senegal, although the objectives and terms of renegotiation are not yet public, transparency will become crucial. Clear communication is essential lest investors perceive the process as unfair or the government as capricious, thereby maintaining a stable investment climate. Informing citizens is also important to manage expectations, avoid negative perceptions, and strengthen the legitimacy of the outcomes. Senegalese citizens expect the government to clearly show how these renegotiations will improve their daily lives, particularly in terms of infrastructure financing, job creation, and sustainable development. Senegal must strike a balance between defending its national interests and maintaining investor confidence.
Best practices in renegotiation transparency, such as those observed in Guinea and the Democratic Republic of the Congo, where information on the process and the scope covered were published, demonstrate the need to make these elements public from the outset. Additionally, Senegal’s NC-EITI (National Committee for the Extractive Industries Transparency Initiative) can play a crucial role in monitoring documents related to renegotiations, as well as publishing amendments and changes in accordance with Requirement 2.4 of the EITI Standard. An effective communication strategy must not only convey the objectives and process to shape expectations and manage the impact on the investment climate, but also ensure the integrity of the renegotiation process.
3. Find the right balance in the composition of the renegotiation team
While the composition of the team should focus on sector-specific expertise, it is essential to open up to other skills and competencies, including independent experts. This will help incorporate best practices and avoid certain mistakes. To this end, we recommend:
- Empowering the committee. Having been present in Senegal for almost a decade, companies may have a background and relationships in the country and may appeal to other officials to resolve points of friction in negotiations. The government must ensure that communications with companies are conducted solely through the negotiation team, unless part of an accepted strategy. The negotiation team must have a clear mandate to conclude agreements, subject to executive or legislative approval. The limits of this power can influence the strength of the government’s negotiating position.
- Structuring the committee to reflect technical and political expertise. Including two distinct subcommittees would be additive: a multidisciplinary technical subcommittee for contract review and a political/strategic subcommittee. A purely technical committee may lack the political weight to engage the government in its decisions, posing the risk of disavowing negotiation outcomes, which could undermine the process. On the other hand, an overly political committee can hinder negotiations, and the necessary technical skills may be lacking. Finding a balance between technical expertise and political involvement is crucial.
- Including both experienced veterans and experts with fresh perspective. Officials structuring the committee should integrate members with a deep understanding of the initial negotiations and those responsible for overseeing and enforcing existing contracts. While it may seem unusual to retain the same individuals who negotiated the initial contracts, their expertise is essential for understanding the nuances of the contract and the established relationships. However, officials should also include individuals who were not involved in the initial process, without prior affinity with relationship management, to bring a fresh perspective and foster a positive dynamic for change.
4. Be cautious with external support
Renegotiating international contracts of this scale is complex. The effective use of external support (e.g., lawyers, tax experts, environmental specialists) can lead to positive outcomes in renegotiations, but officials should not presume that their involvement is necessary, especially internationally. The government must first assess the capabilities of its negotiation team and identify the need and relevance of external assistance. If officials identify a specific need, appropriate advisors must be chosen, especially in cases of market research and international standards. However, external support, particularly foreign, should remain secondary and should not undermine the authority of the negotiation team. Interventions by external advisors should be limited as much as possible in the process, and they should not replace local authorities. We recommend consulting external experts outside the negotiation room (e.g., between negotiation meetings to formulate positions or respond to company positions). The committee should define precise needs and choose competent advisors without conflicts of interest. The government’s renegotiation leaders should ensure smooth integration with local teams and select experts sensitive to local priorities while managing the associated costs. By adhering to these criteria, officials can optimize the effectiveness of external advice in renegotiation processes.
5. Prevent risks of corruption and weakening of sector governance
Senegal, still scarred by the PetroTim affair, has experienced the corruption risks of contract negotiation processes. To prevent renegotiation processes from compromising sector governance, it is crucial to adopt robust transparency and governance measures.
In Indonesia, for example, renegotiation objectives were defined by contract amendment guidelines, reviewed by parliament, and audited by an internal controller, which introduced a level of oversight and minimized political interference. Reliance on existing laws and regulations, which required regulatory changes for any alteration, also limited political interference. Restrictions on the participation of team members in the concerned industries were put in place to avoid conflicts of interest. Senegal should likewise establish strict governance mechanisms and ensure rigorous oversight to preserve the integrity of the process and avoid corrupt practices.
The renegotiation of oil and gas contracts in Senegal represents a decisive turning point in the management of natural resources. Faced with the challenges posed by political dynamics and the need to restore trust after the PetroTim affair, a rigorous and transparent approach is imperative. The establishment of an effective and transparent communication strategy, a strong and well-structured multidisciplinary renegotiation team, and the judicious use of external support are essential to ensure the success of this process.
To achieve better results in the process, it is also crucial that the government prevents renegotiations from dragging on, as this can be a strategy used by companies to exert economic pressure. By drawing on international best practices, the Senegalese state cannot only maximize long-term benefits but also attract potential investments and strengthen collective trust in the exploitation of natural resources.
We will continue to closely monitor the evolution of this process and provide additional recommendations as objectives become clearer and developments materialize.
Gas Expansion: Experts Concerned Over Potential Rise in Methane Emissions
Should African nations develop their fossil fuel resources?
Senegal’s Gas-to-Power Ambitions: Securing Scale and Sustainability
Key messages
- Senegal will benefit from generating electricity from some of its gas, but authorities should carefully consider the scale of the country’s “gas-to-power” ambitions and how they relate to its renewable energy plans. This is a pivotal moment for achieving the government’s energy and sustainable development objectives.
- Recent plans to develop over 3 gigawatts (GW) of gas-to-power capacity by 2050 may face obstacles. Senegal may not be able to extract enough gas to feed the power plants; it may also struggle to raise sufficient funds (at least USD 2.2 billion) to build the necessary infrastructure.
- A more balanced energy mix, with a stronger emphasis on renewables alongside gas, offers Senegal a more secure pathway, but necessitates a cohesive long-term strategy and international support.
- Senegal’s participation in a Just Energy Transition Partnership (JETP) has led to increased medium-term renewable power generation goals—possibly to around 1 GW by 2030. To reach them, Senegal’s development partners must deliver the promised financial and technical support.
- If Senegal realizes only those plans that are published, gas will comprise 75 percent of installed capacity in the long term. The absence of a long-term plan for renewables could lock the country into this large role for gas, inhibiting the intended catalytic effect of the JETP and preventing the government from fully leveraging the country’s solar and wind potential.
- A more transparent and inclusive approach will help Senegal’s government to refine and implement its energy plans, helping to manage public expectations, foster public trust and increase credibility with investors.
Senegal has undergone an important political evolution with the recent elections and peaceful transition of power. Yet certain priorities remain consistent for the Senegalese government and population, including increasing the supply and affordability of energy. Achieving this is essential to addressing lingering energy poverty in the country and driving further economic development.
Following significant gas discoveries, and with the ongoing development of several gas projects, many Senegalese expect that domestic use of gas will be the answer to Senegal’s energy needs.
While gas will have an important role, including in directly increasing power generation, the size of gas-to-power plans and their interplay with renewables plans will be a critical determinant of whether the government achieves its energy and sustainable development goals.
The government risks falling short of its goals if it (a) pursues as large an expansion of gas-to-power capacity as envisaged in recent plans and (b) underestimates the role that renewables could play in the country’s future energy mix.
The most recent government plans, as set out in a policy review undertaken by the International Energy Agency (IEA) in collaboration with the Senegalese government, envision developing gas-to-power capacity of more than 3 gigawatts (GW) (through converting existing thermal plants and building new ones). However, the government may struggle to implement this plan. It faces risks of a gas shortage and a shortage of funding to build the necessary infrastructure.
Our modeling suggests that while the amount of domestic supply currently envisaged by the government is sufficient to meet expected demand, it may ultimately prove lower and slower to materialize than the government expects. The Yakaar-Teranga project is particularly critical for supply. Yet a range of factors increase the uncertainty around the project’s development and design. These include BP’s exit from the project, the impending audit of the petroleum sector promised by the new administration that may prompt contract renegotiations, and the global energy transition.
The government might also face a funding shortage. In addition to its plans to increase investment of public money in upstream projects such as Yakaar-Teranga, we estimate that it might need to find at least USD 2.2 billion to construct the planned pipelines and power plants. But the pool of financing available for gas-to-power infrastructure is shrinking given global climate concerns and associated pressure on financiers. The reduction in international public finance is a particularly significant challenge given its role in derisking projects for private capital.
In contrast to the government’s plans for gas, plans for renewables are unclear. The aim of Senegal’s recently announced Just Energy Transition Partnership (JETP) is to increase the share of renewables to 40 percent of installed capacity by 2030—possibly to around 1 GW. However, current plans do not indicate any additional renewables capacity in the longer term (beyond 2030) despite the catalytic impact that the JETP should have on this potential.
If that remains the case and the plans detailed in the IEA policy review are the only ones realized, even if Senegal does reach the JETP target of 40 percent renewables by 2030, gas will increasingly dominate the mix in the long term.
A larger role for renewables alongside gas could offer a less risky pathway to achieving Senegal’s energy goals as well as other benefits, such as freeing up gas for non-power uses. The lack of detail on renewables plans may reflect the fact that the government is in the process of developing the JETP investment plan. Officials also might worry that the JETP financing will not materialize.
Nevertheless, as the government is making decisions on the gas sector now, a full accounting of the interplay between gas and renewables cannot wait. Otherwise the government risks locking Senegal into using large quantities of gas far into the future. Any delay will inhibit the catalytic impact of the JETP on longer-term renewables prospects and thereby prevent the country from benefiting as renewables become increasingly cheaper and more secure than gas.
This more balanced approach will still likely require a significant expansion of gas-to-power capacity from today’s levels, and Senegal’s international development partners should recognize this by providing necessary financial and technical support. However, the government should right-size this expansion. It should use gas as a complement to renewables by employing gas as a “peaker” as much as possible. To achieve this, the government must make careful choices about gas plant technology and carefully negotiate gas purchases and gas power plant contracts.
Pursuing a pathway with a larger role for renewables is not without its own challenges given their higher upfront costs and the need for grid investments to address intermittency. We estimate that the additional 346 MW renewables capacity required to reach 1 GW by 2030 could cost around $920 million (exclusive of any necessary grid upgrades, flexibility systems, and energy storage capacity).
Senegal’s international development partners must deliver on their JETP promises in the near term, including by bringing down high financing costs and making riskier investments in hard-to-finance projects. They must also provide more money in the longer term. Rich countries must reverse their dismal records on meeting their climate finance commitments.
At the same time, Senegal’s government must create a stronger enabling environment for both gas-to-power and renewables investments. It should produce a credible long-term strategy on power sector development that provides clarity to relevant stakeholders, including investors. It should also resolve the overlapping responsibilities between institutions and provide more clarity on the processes and procedures for making key regulatory decisions.
Building more public consensus and trust will support the credibility of this long-term planning and the stability of the regulatory framework. Given high public expectations of the transformative impact of gas-to-power, greater public awareness of the various opportunities, risks and trade-offs could change the narrative and allow for the new administration to adapt the energy strategy as appropriate. The new president’s commitment to transparent governance bodes well in this regard, paving the way for Senegal’s new administration to refine and implement its energy plans with greater transparency and inclusivity than past administrations.
The above actions will give Senegal a better chance of achieving the energy future that the government’s strategy is striving for.
Right-sizing Nigeria’s Gas Expansion Plans: What Citizens Need to Know (X Space)
Online: X
Meeting Nigeria’s domestic energy needs remains one of the most significant barriers to sustainable development and economic growth in the country. The government proposes to ramp up gas production, utilization and export, with the aims of supporting industrialization, boosting domestic energy supply (for power, cooking and transport), and increasing government revenues.
Whether ramping up gas utilization is feasible, or indeed the appropriate approach to achieving Nigeria’s energy supply and economic ambitions, is uncertain. What is certain is that global pressure to transition away to cleaner energies and defund fossil fuel projects complicates the process of realizing that goal and could lead to wasted investments that jeopardize the economic and energy security of Nigerians in the future.
In order to ensure that Nigeria’s gas ambitions contribute to, rather than hinder Nigeria’s sustainable development and meets national and global commitments, it is necessary for stakeholders and the general public to understand potential risks and viability factors associated with government’s ambitions to expand gas use, considering the global energy transition.
NRGI and civil society partners have led advocacy for government to disclose its gas plans following commitments by government to the Decade of Gas initiative in 2021. Although the decade of gas plans has now been disclosed, specific details on the action plans and efforts to mitigate the risk of stranded assets are undisclosed.
Objectives
- Situating fossil fuel expansion within the context of the global energy transition
- Provide clarity and build momentum on the need for rightsizing Nigeria’s gas plans
- Provide an overview of Nigeria’s gas ambitions: The Decade of Gas: goals, risks, opportunities and what must be done
Speakers
- Tengi George-Ikoli, senior officer, Natural Resource Governance Institute (NRGI)
- Dr. Louis Brown Ogbeifun, founder/CEO, AfriTal
- Olusegun Elemo, executive director, Paradigm Leadership Support Initiative
- Felicia Dairo, project manager, Centre for Journalism Innovation and Development (CJID)
- Faith Nwadishi, executive director, Centre for Transparency Advocacy
- Enebi Opaluwa, acting head, Natural Resource Climate Governance, BudgIT
Featuring NRGI's
Tengi George-Ikoli
Nigeria Country Manager
Open Letter Calling for Detailed Action Plans on Nigeria's Decade of Gas Policy
Dear Decade of Gas Secretariat,
We, the undersigned coalition of civil society organizations, commend the Federal Government and the Decade of Gas Secretariat (DoGAS) for the successful launch of the Decade of Gas website, a crucial platform outlining efforts against government’s gas plans for 2021 to 2030, and disclosing the decarbonization and gas supply strategies which will be implemented within 24 months by the execution committee.
In line with President Bola Ahmed Tinubu's commitment to advancing the Nigeria Gas Master Plan, we previously urged the then-incoming administration to develop and present a comprehensive and transparent strategy for achieving Nigeria's gas plans. We are pleased to observe that the Decade of Gas Secretariat has responded positively by adopting some of the recommendations from our series of publications, convenings, and dialogues between July 2023 and May 2024.
While we commend the progress made, we also recognize that some critical demands remain unaddressed, such as potential risks and alignment of the gas plans to Nigeria's energy transition plan, among others.
The coalition, therefore, calls on the Federal Government and the Decade of Gas Secretariat to:
- Publish a comprehensive action plan for the DoGAS over the 24-month stated implementation period especially for the Nigerian Gas Flare Commercialization Programme (NGFCP) and the Presidential Compressed Natural Gas (CNG) initiative.
- In addition to the national agenda, assure impact and visibility on the subnational government agendas and align with the government’s energy transition plans including the Energy Transition Plan 2060, Long Term Vision 2050 and the Nationally Determined Contribution (NDC).
- Provide clarity on a financing pathway for necessary investments in Compressed Natural Gas (CNG), Liquefied Petroleum Gas (LPG) and petrochemicals infrastructure.
- Include methane abatement financing strategies in its decarbonization framework in line with Nigeria’s climate change commitments.
- Ensure the viability of the proposed twenty (20) priority gas projects to prevent potential of stranded assets considering shrinking global markets for fossil fuel energy sources.
- Strengthen methane abatement to keep gas exports competitive and retain access to major export markets considering upcoming stringent regulations on high-emitting cargoes by the EU, and the potential for similar actions by other markets.
- Develop and implement mitigation strategies for environmental, social and health risks associated with gas use and mainstream gender and youth-based approaches, integrating these into gas policies.
- Launch comprehensive public education campaigns focusing on gas safety and benefits, targeting all sectors, especially the non-power sector, such as residential, transport and commercial sectors.
- Outline improved strategies for engaging civil society organizations (CSOs), media, communities, women, youth and other stakeholders in policy monitoring and accountability.
We remain committed to engaging and collaborating with the Decade of Gas Secretariat and the government to achieve these goals. By addressing these demands and incorporating diverse stakeholder perspectives, including those of marginalized communities and vulnerable groups, we can build a sustainable and equitable gas sector that benefits all Nigerians while recognizing the imperative of the energy transition.
Signed by:
- Natural Resource Governance Institute (NRGI) – Tengi George-Ikoli
- African Initiative for Transparency, Accountability and Responsible Leadership (AFRITAL) – Dr. Louis Ogbeifun
- Centre for Transparency Advocacy (CTA) and Women in Extractives (WiE) – Faith Nwadishi
- PeaceFront for Development Initiative (Youth Forum on EITI) – Maife Lincoln
- BudgIT Foundation – Enebi Opaluwa
- Centre for Environment Human Rights and Development (CEHRD) – A. Cookey
- Centre for Journalism Innovation and Development (CJID) – Felicia Dairo
- Policy Alert – Tijah Bolton
- Stakeholder Democracy Network (SDN) - Alexander Sewell
- Healthy Life Development Initiative (HELDi) – Dr. Mfon Utin
- Extractive 360 – Juliet Ukanwosu
- Youths and Environmental Advocacy Centre (YEAC-Nigeria) – Fyneface Dumnamene
- Paradigm Leadership Support Initiative (PLSI) – Olusegun Elemo
- Human and Environmental Development Agenda (HEDA) Resource Centre – Olanrewaju Lanre Suraju
Framework for Countries Evaluating Gas-to-Power Pathways - Goal 2: Achieving Energy Security
Key messages
- Some lower- and middle-income countries will need gas to achieve energy security, at least in the near term. But too much dependence on gas for energy can destabilize a country’s economy, energy systems and, ultimately, the lives of its people.
- Energy security requires government officials to correctly predict energy demand. For gas, this is an especially difficult task. Getting it wrong can have high costs, from electricity shortages to wasted public revenues.
- Countries should be realistic about whether they can produce enough gas to fuel power plants for decades to come. Lenders and private energy companies are investing less in new gas extraction. Some countries are also running out of cheap gas, and a switch to extracting higher-cost reserves could force them to increase fossil fuel subsidies or leave consumers to pay more for electricity.
- Governments should, as much as possible, not support deals to import gas. Relying on foreign gas ties a country’s energy system to forces and events outside its control. In the worst cases, this can send shockwaves through economies and upend people’s daily lives.
- Policymakers and electricity users in gas-producing countries need to fully consider solar and wind as alternatives to gas power, and right-size gas plans accordingly. Both solar and wind have their own challenges, but compared to gas, they can offer lower risks and growing advantages for achieving energy security.
This second part of NRGI’s gas-to-power framework interrogates the claim that producing and burning more gas will allow a country to achieve energy security.
It spotlights two big decisions:
Whether governments and energy companies should try to extract more of a country’s own gas for domestic use, and if so, how much.
Whether governments and energy companies should build more infrastructure to transport, burn or otherwise consume gas, and if so, how much.
Use of gas for electricity generation is the focus, though much of the content also applies to other domestic uses (e.g., industry, heating, cooking).
The module provides background on domestic gas use in lower- and middle-income gasproducing countries, then explores two key challenges that any country wanting to use gas for energy security will have to face: 1) estimating demand for gas, and 2) supplying the gas. For each challenge, it poses some critical questions that stakeholders should ask decision-makers.
Who actually makes these decisions varies by country, and can include heads of state, cabinet and ministerial officials, energy sector regulators, officials at state-owned utilities or other energy companies, parliamentarians, and a range private sector actors.
The module presents some case study-based scenarios of what can go wrong when a country mishandles these two key challenges (without suggesting that relying on gas for energy security will always have negative impacts). It also briefly compares solar and wind power’s potential role in energy security with gas.
Framework for Countries Evaluating Gas-to-Power Pathways - Goal 1: Navigating the Energy Transition and Climate Crisis
- Gas will play and important role in the energy transitions of some developing countries. Producing and burning more of it could help backstop renewables and replace dirtier fuels. It could also shield countries from some of the worst effects of the global energy transition— for example, volatile prices for imported fuels.
- Over the longer term, however, investing big in gas-to-power projects could leave countries with domestic energy mixes that cost more, hold back development, and undermine global climate goals.
- Stakeholders should weigh the trade-offs carefully—especially since the future is hard to predict and politics often discounts the future. In particular, they should ask if other, less risky investments and pathways could achieve the same goals.
This document, the first module in a series of five, provides stakeholders with information and options for interrogating three common claims about the role of gas in domestic energy transitions:
Common claim 1.1
“Gas will be a ‘transition fuel,’ a short-term ‘bridge’ to renewable electricity.”
Common claim 1.2
“More gas-fired power is needed to manage the variability of renewables.”
Common claim 1.3
“Gas is a green fuel. Using more of it for electricity will help reduce our country’s carbon footprint and fight climate change.”
Guidebook on Nigeria’s Energy Transition
Nigerian government has designed to transition from fossil fuels—oil, gas and coal—to renewable energy technologies, including institutional, policy, legal and fiscal frameworks.
It is informed by engagements with state and non-state actors including representatives of the government, the private sector, communities, youth and women’s groups, and by their views of the strengths and weaknesses of Nigeria’s energy transition plans. Accounting for Nigeria’s unique context and peculiarities as a fossil-fuel-dependent nation, the guidebook seeks to provide greater clarity on ways to navigate the energy transition for the Nigerian government, civil society, the media, the country’s citizens and the international community. It also seeks to mitigate transition led shocks and strengthen the overall transition process in Nigeria.
The guidebook can enhance stakeholder knowledge of Nigeria’s energy transition process and government action to accelerate the transition. This should encourage the adoption of a comprehensive plan aligned with the needs and realities of most Nigerians. The insights provided in the guidebook may also inspire and influence regional conversations across the African continent, creating a collective demand for a people-centered and just energy transition in multiple countries.”
The Use of Gas for Energy in Low- and Middle- Income Countries
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What are the main risks a country could face if it over-invests in domestic gas?
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Should countries use gas as a “transition fuel” to renewables, or should they focus on growing renewables now?
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Isn’t switching to gas good for the environment since it is a relatively “green” fuel?
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Should countries invest more in gas to achieve energy security?
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What options does a country have to pay for its gas plans?
This primer summarizes some issues that gas-producing countries must address if they aim to use gas to meet their own energy needs. Any nation that extracts gas can either export it to buyers elsewhere or consume it at home—in power plants, cars and buses, household stoves and furnaces or industrial facilities. (Exporting gas comes with other risks and tradeoffs that are not covered here.)
Governments in around two dozen countries in Africa, Asia and Latin America want to build new pipelines, plants and other infrastructure to use some or all their gas reserves at home. They see gas as key for meeting their economic and energy sector goals. (See box below.) But not everyone agrees that investing in domestic gas is the way to go. A range of voices, from grassroots activists and national and regional NGOs to international climate campaigners, argue that gas is too environmentally destructive and economically risky, and that countries should invest in renewables instead. Foreign investors meanwhile are showing less interest in domestic gas projects, and wealthy nations in North America and the European Union have pressured the development banks they own and influence to stop funding gas.
These divisions have made low- and middle-income country gas use into a flashpoint in the global energy transition—and especially on the question of whether the transition will be “just.” The countries with ambitions for gas accuse the wealthier ones of sending mixed messages and having double standards, especially when many of the wealthy countries stepped up their own hunts for gas after Russia fully invaded Ukraine. Meanwhile, the unmet energy needs in some lower-income gas producers are huge, especially in Africa, where the lowest-income, most vulnerable populations are often the last ones served.
Some lower- and middle-income countries will continue burning domestically produced and imported gas for years to come. But in the current debate, oversimplified arguments and political slogans obscure the risks these countries may face if they invest too much in gas, and the challenges of leaving fossil fuels behind. A different kind of debate is needed, one that focuses more on which energy sources can best meet a country’s needs at the least cost to its economy, people’s lives and the planet.
Access to electricity in African gas-producing countries
Electricity access in Africa must triple by 2030 to meet demand, but countries aren’t keeping up. By 2030, almost nine out of every ten people living without electricity could be African, and half of the ten countries with the largest projected population growth are African fossil fuel producers. Fifteen African countries use gas for electricity, with most of the use concentrated in North Africa. A few of these have significantly expanded access to electricity, but mainly using hydropower, solar and wind—not gas. Meanwhile, two-thirds of schools and one in four health facilities in sub-Saharan Africa don’t have reliable electricity, which leads to lower rates of school attendance, literacy and graduation, and more preventable disease and death for millions.