To unlock gas demand potentials in Sub Saharan Africa, this is what must be done

To unlock gas demand potentials in Sub Saharan Africa, this is what must be done
  • There is an obvious absence of gas import and storage infrastructure in Sub Saharan Africa and this is hampering the role gas could play in the region's energy mix.
  • A lot of the proposed gas-to-power projects in the region are struggling to receive enough funding.
  • In the meantime, gas will continue to continue to play an increasing role towards meeting Sub Saharan Africa's energy needs.

A recently released insight on Sub Saharan Africa's energy sector by Fitch Solutions said investments are urgently needed in order to unlock the region's gas demand potentials.

The research firm observed that in spite of the efforts made so far to fully develop the gas sectors of SSA countries, there is still an obvious absence of gas import and storage infrastructure. And this is preventing the bigger role that gas could play in the region's energy mix.

Unfortunately, even though gas consumption in Sub Saharan Africa is projected to grow by 4.2% year-on-year to average 54.7bcm by 2030, a lot of the proposed gas-to-power projects will struggle to receive enough funding during the projected time-frame. And what this means is that the full potentials that could be realised from the growing gas demand in Africa could not be realised. To forestall this, therefore, there is an urgent need for investments.

"Despite a growing interest in developing a gas sector across Sub-Saharan Africa (SSA), there remains a widespread absence of gas import and storage infrastructure and many integrated gas-to-power projects will struggle to gain sufficient funding over the decade. SSA’s gas consumption is expected to grow by an average of 4.2% y-o-y over the decade, to reach 54.7bcm in 2030, from an estimated 35.2bcm in 2020," said a part of the report.

Now, it is important to talk about why some investors are a bit hesitant to invest in Sub Saharan Africa's gas sector. According to Fitch Solutions, a lot of countries across the region suffer from inadequate domestic gas supply and lack of import infrastructure which are two necessary factors that can facilitate a gas economy. And so " without the guarantee of sufficient offtake, investors are cautious of committing to building large-scale import and transport infrastructure."

In the meantime, gas will continue to continue to play an increasing role towards meeting Sub Saharan Africa's energy needs, even though some of the factors highlighted above may continue to hamper demand potentials.

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