CEM REPORT, ENERGY | With German companies increasing their investment in energy, Nigeria stands top of the list to benefit from such investment in 2023.
According to Reuters, companies under the German-African Business Association have indicated interest to increase energy investments in Nigeria and other African countries in 2023.
The report noted that Christoph Kannegiesser, head of the German-African Business Association, highlighted Nigeria, Senegal, Mauritania and Namibia as countries in the region with potential for energy investments with focus mainly on green hydrogen and natural gas in 2023.
The German-African Business Association which represents 85% of German businesses that are active in Africa has indicated an interest to further expand their business investments on the continent in 2023.
In 2022, these companies invested an average of €1.1 billion in Sub-Saharan African countries.
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The association advocates for the following from the German government to enable increased energy investments in Africa;
- Investment guarantees cover not only political risks but also selected commercial risks. These include payment risks such as default or delayed payments, as well as currency risks including shortages of foreign currency and fluctuating exchange rates.
- Project development insurance where the project developer pays an insurance premium and, in the event of project failure, is reimbursed a portion of the project development costs to lower the barriers to entry for small and medium-sized enterprises, which can raise only a very limited amount of risk capital for project development.
- Special research and development support for companies in the field of climate-friendly technologies, like increasing the tax deductibility of research expenditure, supporting pilot programs with new technologies and closely linking promoted university research projects with the German industry.
- An emissions trading system to put a price on carbon emissions and thus establish market-based incentives for the application of low-carbon technologies.
