The CEO of TotalEnergies, Patrick Pouyanne, said on Wednesday that investments in renewable energies in Africa are being hampered by the lack of government loan guarantees, due to the International Monetary Fund’s strict control over countries’ indebtedness.
Pouyanne pointed out that electricity projects in Africa face a solvency problem, with the risk of not being paid back. “When a renewable energy developer wants to develop and has enormous potential, he goes to the government to ask for guarantees,” he explained. However, African governments cannot give these guarantees due to restrictions imposed by the IMF.
As a result, TotalEnergies has focused mainly on business-to-business mining projects in Africa, where there are more payment guarantees.
Despite this, TotalEnergies is involved in renewable energy projects in Africa, including two solar parks in Egypt, plans to build a hydroelectric plant in Mozambique and a solar power and battery storage project in South Africa.
The company has global renewable energy projects totaling 22 gigawatts (GW) of installed capacity by the end of 2023, the largest among major oil groups, with operations in 40 African countries, Latin America, Eurasia, the US and the Middle East.
The comments were made during a government-industry dialogue organized by the International Energy Agency, with a focus on Africa and renewable energies.
Pouyanne expressed disappointment at not seeing a real international financial body to counter-guarantee African states, without asking them for more than is necessary. He cited the example of TotalEnergies’ 1 GW solar plant in Iraq, where the project’s international backers were asking the Iraqi government for more loan guarantees than TotalEnergies itself, leading the French company to completely self-insure the project to avoid burdening the government with more debt.
