New report | Canadian companies behind the expansion of fossil fuels in Africa

As the world seeks to reduce the use of fossil fuels to curb climate change, Canadian companies are financing their expansion on the African continent, reveals a report released Monday.

Jean-Thomas Léveillé
The Press

The Royal Bank of Canada, Sun Life Financial and the oil and gas company ReconAfrica feature on the list of companies singled out in the report “Who is financing the expansion of fossil fuels in Africa?” “, produced by thirty non-governmental organizations, including the German Urgewald.

Their investments in oil, gas and even coal in Africa exceed $2.5 billion, says the document, unveiled on the sidelines of the 27^e United Nations climate conference (COP27).

The report identifies 200 companies that are exploring or developing new fossil fuel reserves or new infrastructure related to these reserves, such as liquefied natural gas (LNG) terminals, oil and gas pipelines or thermal power plants in 48 of the 55 countries of the world. African continent.

At the top of the list sits the French TotalEnergies, which aims to add 2.27 billion “barrels of oil equivalent” to its African production, deplores the report, which underlines that the extraction and combustion of these new resources would be equivalent to three years greenhouse gas (GHG) emissions from France.

The report also dwells on the Canadian ReconAfrica, which “opens a gap for oil drilling over more than 34,000 km^⁠2 in the fragile ecosystem of the Kalahari Basin”, where it drills test wells.

This vast cross-border natural conservation area, where the Okavango River flows into a delta listed as a United Nations Educational, Scientific and Cultural Organization (UNESCO) World Heritage Site, straddles Namibia and Botswana .

Canadian funding

Funding for these fossil fuel projects comes from all over the world, starting with the US investment fund BlackRock, whose contribution is valued in the report at more than US$12 billion (16 billion Canadian dollars).

Also on the list of investors is Sun Life Financial, an insurance and investment company founded in Montreal, whose financing for fossil fuel projects in Africa amounts to 937 billion dollars (1.2 trillion Canadian dollars). .

Sun Life Financial boasts on its website of “being on the list of the 100 most committed companies in terms of sustainable development on a global scale in 2022”.

The Royal Bank of Canada (RBC) is on “the top bankers’ list of fossil fuel expansion in Africa”, with funding totaling $1.013 billion (C$1.3 trillion), the report said.

“Every dollar spent on new oil and gas exploration goes against the roadmap for [contenir la hausse de température planétaire au] 1.5°C established by the International Energy Agency in 2021”, laments Heffa Schuecking, director of Urgewald, quoted in a press release.

Ironically, 71% of bank financing for fossil fuel expansion projects in Africa from 2019 to July 2022 came from member banks of the “Net Zero Banking Alliance”, the organization points out.

“It is time for financial institutions to step back from companies that are blowing up the global carbon budget and locking Africa into the polluting energy sources of the past,” says Omar Elmawi, director of the Muslims for Human Rights organization. the person, also quoted in the press release.

more coal

Enemy number one of the climate, the first fossil fuel from which the countries of the world are trying to wean themselves, coal also enjoys international financing of fossil fuels in Africa, the report worries.

“A total of 10,135 megawatts (MW) of new coal-fired capacity is still in the pipeline,” the document said, noting that new power plants, mines or transport infrastructure are planned or under development in 11 countries. Africans.

More than half of the new coal-fired power generation capacity is planned in Zimbabwe, but much of it will power mining operations there and not the population, 47% of whom still do not have access to electricity, says the report.