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Donald Trump’s designs on Venezuela and Greenland have sent shock waves around the world. Canadian premier Mark Carney said they have created a “rupture in the world order”, as political alliances that have held for over 80 years are thrown aside.

And as the US seeks to carve out a Western Hemispheric sphere of influence, questions about the dollar’s future as the lynchpin of the global economy are growing louder. Many other parts of the world are switching to green energy sources as renewable energy becomes cheaper than fossil fuels, and countries forced to pay back loans in dollars are eyeing alternative currency options to free themselves from the penalty of fluctuating exchange rates amid unpredictable policy shifts.

As a result, the continued relevance of the petrodollar system – in which oil is traded in dollars and guarantees demand for US currency – may be less than assured.

What is the petrodollar system?

The petrodollar system was established in the 1970s following the collapse of the Bretton Woods system and is one of the most consequential monetary arrangements in modern history.

In 1944, the Bretton Woods agreement made the US dollar the anchor of the global monetary system, pegged to gold and with other currencies fixed to the dollar. The framework aimed to provide global financial stability following the economic fragmentation of the Second World War and cemented the dollar as the world’s reserve currency.

US President Richard Nixon abandoned the gold standard in 1971 to curb inflation after foreign central banks – increasingly reluctant to hold depreciating dollars – began converting their dollar reserves into gold. The petrodollar system emerged as an alternative means of keeping the dollar as the backbone of international transactions.

The petrodollar system refers to the pact that Gulf Cooperation Council (GCC) states – including Kuwait and Saudi Arabia – made with the US, agreeing to price oil in dollars and to recycle revenues into US Treasury securities in return for military protection and sales of advanced weaponry.

    Andrés Arauz, former Ecuadorian minister and central bank director, told Green Central Banking that ramifications for the global economy were immense: “So oil and gas [are traded in dollars], but then also downstream with all the derivatives, but then also all the chemical elements derived from the oil industry and petrochemical industry. And then likewise, upstream with all the technology and inputs required to extract the oil, [it] created a dollar-denominated value chain with global and international repercussions.”

    Arauz also notes that international accounting standards set by institutions like the IMF reinforce the system by requiring central banks and organisations to report reserves in dollars, solidifying the greenback as the default unit of account.

    For decades, this system delivered guaranteed demand for dollars, recycled oil revenues into safe-haven US debt markets, and provided outsized geopolitical leverage to the US Federal Reserve given the need of other countries to accumulate dollars to conduct global transactions.

    Fadhel Kaboub, associate professor in economics at Denison University, explains how this “exorbitant privilege” distorted the global economy in the US’s favour. “All countries operate … within a system where they have to accumulate reserves not in gold anymore but in dollars and countries that have debt, their debt is denominated in dollars. So that created a locked-in system that gives the US dollar a privilege as the dominant payment system and gives the opportunity to weaponise this system.”

    The petrodollar system has also encouraged and amplified US consumption of fossil fuels and its contribution to greenhouse gas emissions. Kaboub, who is also a member of the United Nations High-Level Advisory Board on Economic and Social Affairs, says the system has “rewired” the global economy into an extractive model that promotes environmentally destructive industries.

    But as decarbonisation accelerates and renewable energy displaces fossil fuel value chains, the petro-lynchpin of dollar dominance faces unprecedented strain.

    Is the petrodollar in decline?

    Signs of discontent are increasing, placing the dollar’s decades-long dominance under unprecedented pressure.

    BRICS countries are discussing new financial mechanisms that will make trading within the bloc easier but may also reduce reliance on existing dollar-dominated channels. Both India and Brazil have denied that linking BRICS digital currencies is part of moves towards de-dollarisation, but such a move will likely cause concern in the US.

    Meanwhile, European Central Bank President Christine Lagarde made headlines in May 2025 with her blunt assessment that the current global landscape presents a significant opportunity for a “global euro moment”, as investors “unsettled by unpredictable US economic strategies” increasingly reduce their exposure to dollar-denominated assets.

    These developments reflect deeper structural shifts. The dollar’s share of global reserves has declined from 71% to 56.3% since 2008, with central banks purchasing over 1,000 metric tons of gold annually for three consecutive years. China slashed its US Treasury holdings from US$1.3tn in 2013 to just $682bn by November 2025, while simultaneously expanding yuan-based trade across Asia.

    Africa records fastest-ever solar growth, as installations jump in 2025

    This shift was triggered by what Arauz describes as “eroding trust” in US financial systems.

    “Perhaps the most serious element that has accelerated this diversification has been the weaponisation of the hegemonic banking system,” Arauz said. “[Through] sanctions, through asset freezes, through confiscation of international reserves in many countries … [these] have definitely stirred things up and made countries reflect about the reliance on this previously thought of neutral system that is now, on the other hand a threat, to their national sovereignty and economic policies.”

    The climate crisis is also acting as a catalyst. As the world transitions away from fossil fuels, structural strain is placed on the demand for dollars, and the more the US clings to fossil fuel dependency in order to maintain monetary dominance, the deeper the cracks become.

    Gulf states have long-term plans to diversify away from oil and reinvest a substantial portion of their oil revenues in green value chains, challenging the core pact which upholds the petrodollar system that US currency dominance has long depended on.

    And while economists expect the dollar to remain the primary reserve currency in the near term, it has also been noted that once transitions to a new system are underway, they can happen very quickly. Speaking at the World Economic Forum in Davos in January, Jeffry Frieden, political science professor at Columbia University, warned of “an erosion of confidence in the dollar” amid mounting doubts about the safety of US Treasuries as “the most important financial asset in the world”.

    ‘US pulling itself out of the picture’

    The Trump administration’s response to a shift away from the dollar has been to double down on arms sales and fossil fuel infrastructure – what Kaboub calls a “long-term strategic failure” that fundamentally misreads the changing dynamics of global power.

    Trump’s recent $142bn arms deal with Saudi Arabia aims to tether Gulf revenues to the dollar through military exports. However, economists like Maya Senussi at Oxford Economics and John Sfakianakis of the Gulf Research Centre warn that financing such deals alongside decarbonisation projects will strain GCC budgets, and Bloomberg estimates it will require oil prices to be at least $96 a barrel just to break even. Brent oil prices currently hover around $67-68.

    And in the Global South, higher oil prices may inadvertently threaten dollar dominance by exacerbating debt burdens by increasing repayment costs, pushing countries towards cheaper (and greener) energy systems. America’s transition to net fossil fuel exporter status means higher oil prices now strengthen rather than weaken the dollar, creating a triple blow for dollar-indebted countries in Latin America and Africa: higher energy costs, escalating debt servicing and constrained fiscal space.

    The very mechanism designed to strengthen dollar ties – expensive arms deals premised on elevated oil prices – accelerates the search for alternatives among countries holding critical transition minerals like lithium, copper and cobalt. This pushes the US further from the green value chains of the future.

    “The US is pulling itself out of the picture, it’s divesting from the green technologies and green industries. Which means it’s moving away from its interest in critical minerals,” says Kaboub. “So the remaining big player is China, and it’s a friend of the Global South.”

    Today, China controls 85-90% of global rare earth processing and offers renewable energy equipment that remains attractive to the GCC despite US and EU tariffs. This is thanks to competitive pricing and comprehensive infrastructure approaches that western competitors have largely failed to match.

    ‘America needs you’: US seeks trade alliance to break China’s critical mineral dominance

    Kaboub says that Trump’s minerals-for-security deals, such as in Greenland and elsewhere, may secure short-term market access but erode global trust in US foreign policy, a cornerstone of confidence in the dollar. “The isolated backwards technology bloc is going to be the United States,” he says.

    As Lagarde observed, investors increasingly seek “geopolitical assurance in another form” by directing investments toward regions perceived as “dependable security allies” – but this no longer automatically defaults to the US as its government criticises its one-time allies and jeopardises the future of NATO.

    Yet the petrodollar system faces challenges that extend far beyond the geopolitics of sanctions; climate change has introduced structural pressures making the core foundations of dollar dominance increasingly untenable.

    However, given Trump’s bellicose stance on Venezuela and Greenland, there is a risk that American policymakers will not recognise this new reality until it is too late.

    This article was originally published by Green Central Banking.

    The post Explainer: What is the petrodollar and why is it under pressure? appeared first on Climate Home News.

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    Why the global electrification agenda misses the point on Africa’s energy crisis 

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    Dola Oluteye, PhD, is a senior fellow in energy and transport policy at the UCL Energy Institute and founder of The Professional African Network Advisory Initiative.

    At the June 2026 UN Climate Meetings in Bonn, the incoming Turkish COP31 Presidency introduced a headline target for the Action Agenda: raising electricity’s share of global final energy consumption from around 20% today to 35% by 2035

    Backed by the international Electrify Now campaign – also launched in June by the European Commission and governments across five continents, including Ethiopia – the aim is to replace fossil fuels with clean energy by shifting the way we travel and transport goods and commodities, cook and warm our homes and offices, and power our industries.

      On paper, this is a welcome signal. Yet, as world leaders line up behind global goals in the lead-up to COP31, African nations face a fundamental question: whose energy transition are we talking about? For the roughly 600 million people living without electricity on the continent, international climate targets often sound less like a lifeline and more like a conversation happening on another planet.

      For developed countries, electrification is largely a replacement exercise – swapping petrol and diesel vehicles for electric ones, and gas boilers for heat pumps powered by existing, stable grids. 

      But across sub-Saharan Africa, the challenge is vastly different. The region accounts for 85% of the global population without electricity, up from 50% in 2010. Here, electrification is not a technology swap; it is the foundational building block of human dignity, economic sovereignty, energy access and modern development.

      Electricity connections must deliver real development

      Half of the number of people without electricity access in Africa live in three countries – Nigeria, Ethiopia and the Democratic Republic of Congo – while 900 million other Africans lack clean cooking solutions.

      The proposed global electrification goal must not treat a continent with nearly half of its population without electricity the same way it treats mature Western economies.

      To regard electrification merely as a tool for decarbonisation misses the core reality of our continent. Africa is not just transitioning an existing energy system; we are building one from the ground up in many places.

      If a global electrification target of 35% by 2035 is to mean anything for Africa, it must be rooted in African realities. That begins with acknowledging that expanding power connections alone is insufficient. 

      China’s industrial engine starts to break its fossil fuel habit

      Energy poverty does not end when a power line crosses a village; it ends when electricity is reliable, affordable and powered by clean sources that spur productive economic activities. Connecting households to a micro-grid they cannot pay to use does not deliver development.

      Electrification can also help solve the critical issue of super pollutants in countries like Nigeria, notably the production of methane and black carbon, by replacing combustion-based systems with cleaner, electric alternatives.

      Breaking from past extractive models

      Equally critical is how the electricity is generated. Within some African policy circles, electrification has occasionally been viewed with scepticism – seen as a possible Trojan Horse to justify expensive nuclear projects or to expand long-term fossil gas lock-ins. 

      We must be clear: expanding electricity demand while increasing reliance on volatile fossil fuels or unviable, high-cost infrastructure is a false solution.

      True electrification must be paired directly with the massive development of Africa’s unparalleled renewable energy resources.

      Africa holds 60% of the world’s best solar resources, alongside immense hydro, wind and geothermal potential. Tying the global electrification push to renewable energy capacity and local battery storage is the only pathway that protects African economies from international fuel price shocks while keeping our climate commitments intact.

      Global climate negotiations such as those ongoing at the International Maritime Organization (IMO) offer another building block for Africa’s green energy future.

      International trade linked to 20% of global emissions – but imports ignored

      Adopting a shipping carbon price at the IMO this year, through the Net-Zero Framework, would create a climate fund worth $12 billion a year. This finance could be used not only towards the electrification of Africa’s ships and ports, but also for building broader renewable energy production on the continent.

      Furthermore, global initiatives must break from past extractive models. Africa cannot remain merely a site for extracting critical minerals – such as lithium, cobalt, and copper – to feed green supply chains elsewhere, only to import expensive finished technologies.

      An authentic, inclusive campaign must support the development of local industry, mineral value addition and job creation on the continent.

      Africa’s COP31 agenda should centre clean electrification

      To achieve this, international campaigns like Electrify Now must deepen their partnership with Global South institutions. Western-centric messaging encouraging people to buy electric vehicles and install heat pumps at home must be paired with calls for robust transmission grids, decentralised mini-grids, industrial energy security and affordable clean cooking.

      For this to happen, it would be great to see more African governments, businesses and civil society organisations join the Electrify Now campaign, where they can advocate for the challenges and opportunities on our continent.

      Ethiopia is a great example, where a government policy to ban the importation of petrol and diesel cars has led to the country becoming a continental leader in the uptake of electric vehicles. Meanwhile, the Grand Ethiopian Renaissance Dam has seen the cost of electricity come down significantly and accounts for more than half of Ethiopia’s renewable energy generation capacity.

      Türkiye says it has “final decision” at COP31 despite Australia running negotiations

      The road to COP31 offers Africa a pivotal opportunity to place clean electrification at the very centre of its economic and climate agenda.

      By taking ownership of this narrative, African leaders can insist that global targets deliver capital, technology sharing and infrastructure investments tailored to local needs.

      Electrification is not a luxury or a secondary climate goal. Powered by renewable energy – the African sun and wind – it can be the engine of our green industrial transition. It is important for global climate architecture and Western governments to be aligned with that reality.

      The post Why the global electrification agenda misses the point on Africa’s energy crisis  appeared first on Climate Home News.

      Why the global electrification agenda misses the point on Africa’s energy crisis 

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      Fossil fuel expansion threatens COP31 hosts’ credibility, experts warn

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      Türkiye and Australia risk losing their credibility as hosts of this year’s COP31 UN climate summit if they keep betting on fossil fuels at home, climate policy experts have warned. 

      As governments are expected to continue fraught talks over how to advance the global transition away from oil, coal and gas in Antalya this November, both of the co-host countries are pursuing fossil fuel expansion at home, without a national timeline to phase out their use.

      Türkiye has accelerated its rollout of wind and solar energy in recent years. But that progress has yet to make a dent in the country’s dependence on fossil fuels for power, as demand growth has outpaced the renewables build-out, new analysis by Climate Action Tracker (CAT) has found.

      The share of electricity generated by burning coal and fossil gas – 56% in 2025 – has barely changed since 2019, and total fossil fuel use in the power sector, and the emissions it produces, are still rising, according to the report released on Friday.

      The Turkish government has also signalled that fossil fuels will remain a central component of its energy mix and has outlined plans to expand the country’s burgeoning domestic gas production in the Black Sea.

      ‘Need to demonstrate seriousness’

      Australia, which will chair the Antalya negotiations, relies on fossil fuels for over 60% of its electricity, with coal alone still supplying 45%. According to experts, it lacks an ambitious plan to shift away from fossil fuels at home, relying heavily on carbon offsetting to reach its climate targets.

      Australia is also the world’s third-largest fossil fuel exporter and has plans to expand its coal and gas production, which is backed by significant government subsidies. It recently upset climate groups by approving an extension of the Saraji open-cut coal mine in Queensland.  

      Türkiye says it has “final decision” at COP31 despite Australia running negotiations

      Jennifer Morgan, a senior fellow with the Fletcher School of Law and Diplomacy at Tufts University and former climate envoy for Germany, said Türkiye and Australia need to demonstrate their seriousness about their COP presidency roles by leading by example on the energy transition.

      “They have made progress in renewable energy,” she told reporters this week. “But I think their credibility – and their ability to therefore bring momentum and good outcomes to the COP – will depend on their taking further action at home.” 

      Türkiye’s electrification homework

      The co-hosts’ fossil fuel policies are being scrutinised in the run-up to the annual UN climate summit, with much riding on the signal climate diplomacy sends on the energy transition.

      Türkiye has so far stopped short of putting any overt political capital behind the fossil fuel transition itself. It has instead been rallying support for a new global electrification target of 35% by 2035, seen as the centrepiece of this year’s non-negotiated Action Agenda put forward by Ankara.

      Electrification emerges as COP31 priority

      COP31 president Murat Kurum said last week the push to electrify economies – through measures like electric vehicles and heat pumps – will “automatically” lead to a reduction in the use of fossil fuels.

      Türkiye’s own energy plan projects the country’s electrification rate would fall short on the global target and only hit 25% by 2035, according to the CAT report, which called for a “substantial step-change” in electrification policies and the deployment of more renewable power and grid infrastructure. 

      Coal still dominant

      CAT’s analysts also warned that, without a parallel phase-out of fossil fuels, rising electricity demand risks being met in part by coal and gas, failing to deliver the emissions reductions the electrification target is meant to achieve. 

      Türkiye has had some success in its clean energy build-out: the share of electricity generation from wind and solar rose to 22% in 2025, up from 12% in 2020, according to the CAT report.

      But coal’s role in Türkiye’s electricity mix has also grown, in both its share and absolute terms, over the past decade. And while reliance on fossil gas has declined overall, it still plays an important role in Ankara’s energy policy, which is pushing to boost domestic gas production in the Black Sea.

      Pilot boats assist the Osman Gazi as it navigates the Bosphorus on its way to the Black Sea on May 29, 2025 in Istanbul, Turkey. The platform will dock at the Filyos Port in the Black Sea and will stay for a 20 year mission and will provide double the natural gas intake of Turkey to 20 million cubic meters per day. (Photo by Chris McGrath/Getty Images)

      Pilot boats assist the Osman Gazi as it navigates the Bosphorus on its way to the Black Sea on May 29, 2025 in Istanbul, Turkey. The platform will dock at the Filyos Port in the Black Sea and will stay for a 20 year mission and will provide double the natural gas intake of Turkey to 20 million cubic meters per day. (Photo by Chris McGrath/Getty Images)

      Dr Niklas Höhne from the NewClimate Institute said the government could demonstrate leadership as COP31 president by building on its recent successes in increasing its renewable energy capacity and announcing targets and plans to phase out coal and gas ahead of the summit.

      According to CAT, Türkiye should phase out coal by 2040 and fossil gas by 2045 at the latest to align its power sector with global efforts to limit the rise in global temperatures to 1.5C above preindustrial times. 

      Türkiye quiet on fossil fuel roadmap

      Ümit Şahin, coordinator of climate change studies at the Istanbul Policy Center (IPM), said Türkiye’s strategy is to approach the fossil fuel debate exclusively from the “end-use point of view”.

      “I don’t expect any push from the Turkish presidency to the producer countries in terms of fossil fuel production,” he told reporters.

      Neither does Şahin believe the Turkish presidency will throw its political weight behind another big-ticket item for COP31: a new global roadmap to transition away from fossil fuels. 

      Brazil took on the responsibility to voluntarily draft this document outside of the formal negotiations as a way to break the deadlock at last year’s UN summit in Belém when governments clashed over whether to develop one. 

      The outgoing COP30 presidency will deliver the roadmap in early November – but it will be up to Türkiye and Australia to guide countries towards a decision on how the blueprint will be taken forward, either inside or outside the negotiations.

      Leadership needed

      Australia’s Chris Bowen, COP31’s president of negotiations, promised to lobby producing countries to deliver a “meaningful step forward” on the fossil fuel transition in an interview with The Guardian earlier this year. But he has been quiet on the role Australia sees for the fossil fuel transition roadmap. 

      Natalie Jones, senior policy advisor at the International Institute for Sustainable Development (IISD), said the COP31 co-presidents “must provide clear leadership” on this process.

      “This roadmap cannot be left in a dusty drawer,” she told journalists. “Rather, it must be translated into action, with all countries identifying what elements they can adopt or develop in their own national roadmap.”

        Like Türkiye, Australia has yet to produce a national blueprint for winding down coal, gas and oil. Rather than moving toward a phase-out, state and federal governments have kept expanding fossil fuel licensing over the past year, according to a new analysis published this month by Climate Analytics.

        Under existing policy, both coal and gas are on track to remain in Australia’s power system as late as 2050 – a trajectory the report defines as incompatible with the 1.5C limit the country says it’s committed to. 

        No binding end dates for the Netherlands

        Analysts are watching out for national transition roadmaps as a bellwether for governments that claim to be leaders in the global shift away from fossil fuels.

        The climate and environment ministers of Colombia and the Netherlands, which are co-hosting the Santa Marta conference, embrace on the podium during the high-level segment in Santa Marta, Colombia, April 28, 2026 (Photo: Colombia Ministry of Environment and Sustainable Development)

        The climate and environment ministers of Colombia and the Netherlands, which are co-hosting the Santa Marta conference, embrace on the podium during the high-level segment in Santa Marta, Colombia, April 28, 2026 (Photo: Colombia Ministry of Environment and Sustainable Development)

        The Netherlands, which co-hosted the first fossil fuel transition conference in Santa Marta this year, published its own domestic roadmap earlier this week. The document followed through on a pledge that “leadership on transitioning away from fossil fuels must be backed by concrete action, not just ambitious words”, said a spokesperson for Stientje van Veldhoven, the Dutch minister for climate policy.

        But experts criticised the plan for failing to set a binding end date for the country’s fossil fuel production and use. While targeting a rapid increase in renewables capacity, the Dutch government only commits to phasing out oil, gas and coal “in the energy and feedstock system to eventually zero, and to minimise fossil use” by 2050. 

        Yvo de Boer, a former Dutch diplomat and executive secretary of the UN climate body, said the Dutch roadmap falls short of what’s needed to give industry the confidence to deploy capital in support of the energy transition with greater predictability. 

        “Ultimately, a roadmap without deadlines is nothing more than a footpath paved with good intentions,” he added, writing on LinkedIn. 

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        How clean energy can boost business for Africa’s food producers

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        Despite millions of dollars in grants and technical help for African businesses to power farming and other food production activities with renewable energy, most efforts remain stuck at the early stages because they struggle to find the investors, markets and expertise they need to grow.

        This was the message from a coalition of global institutions working on energy, water and agriculture at this month’s Africa Food Systems Forum in Kigali, Rwanda.

        “Energy, agriculture, water and nutrition actors rarely design solutions together,” the Agri-Energy Coalition said in a Call to Action on powering food systems with clean energy.

        Using more renewables – especially solar power – to drive food systems would reduce food losses, ensure year-round availability and affordability of healthy foods, and improve productivity, income and resilience among farmers, food processors and other small enterprises, the coalition added.

        In an interview with Climate Home News at the forum, Olamide Niyi-Afuye, CEO of the Africa Minigrid Developers Association (AMDA) – a body representing private-sector developers of small-scale, off-grid electricity systems across the continent – said its members are starting to recognise this interdependence and are increasingly considering businesses that combine energy with agricultural activities.

          This, Niyi-Afuye added, could lead to greater supply and use of clean power for key processes like irrigation, food processing and storage, creating new sources of revenue for both sectors.

          CHN: Conversations at the Africa Food Systems Forum highlighted how organisations working in energy and agriculture often operate in silos. What has hampered their collaboration, and how has that affected Africa’s economic development?

          A: Most mini-grid companies in Africa were primarily incentivised to achieve connections. If you look at some ongoing projects, you see a cost-per-connection model [of revenue]. When a subsidy is tied to achieving a connection, regardless of whether it is a productive connection, you might not notice the problem until five years down the line, when you realise the cash flows are not what you projected.

          Despite African walkout, fractious land COP ends without drought deal

          So now we’re in a “come-to-Jesus moment” as an industry, where we’re righting the wrongs and adjusting our business models to make sure companies do not go bust and there is some level of sustainability over the long term.

          The saying is not wrong that we’ve been working in our own silos because we’ve focused on the smaller things instead of the helicopter view. There needs to be cross-pollination [between the energy and agriculture sectors] because, if we are thinking about industrialisation, energy is a key driver of industrialisation. We will not achieve that if we’re not in the room and part of those conversations.

          CHN: Productive use of energy is intended to ensure electricity access goes beyond lighting homes to improving livelihoods, creating jobs and powering equipment. But what happens when farmers cannot afford the equipment they need to do that? How can energy, agriculture and equipment players work together to make the transition more accessible?

          A: That’s why we’re having conversations with companies set up to de-risk the agriculture sector. By leveraging that connection, we’re able to aggregate potential energy needs and develop instruments that make equipment more affordable through bulk procurement.

          We can have arrangements that make it easier for farmers and food producers to lease equipment and eventually own it over a period. There’s no real pressure to recover the capital very quickly because you’re looking at scale.

          Rice farmer Danjuma Okuwa adjusts his newly installed electric rice milling machine at his compound in Rukubi, Nasarawa, Nigeria, September 27, 2022. (Thomson Reuters Foundation/Afolabi Sotunde)

          Rice farmer Danjuma Okuwa adjusts his newly installed electric rice milling machine at his compound in Rukubi, Nasarawa, Nigeria, September 27, 2022. (Thomson Reuters Foundation/Afolabi Sotunde)

          There is a whole lot across the agricultural value chain that needs energy, from farming and harvesting to food processing and value-addition. We need to understand the energy needs across the value chain and bring our members in to provide solutions.

          Developers do not necessarily need to provide every productive-use solution themselves. They can partner with equipment suppliers, financiers, agribusinesses and other service providers to enable customers to use electricity productively. The objective is simple: do not just electrify communities; enable economic activity that uses that electricity.

          CHN: When Africa’s industrialisation is discussed, you hear things like renewables cannot provide enough baseload, while some food processors are sceptical about switching to renewable energy because of these concerns about reliability. What is your response?

          A: It’s not a controversial statement to say that a typical baseload is usually from the grid, and it’s usually from multiple sources including renewable energy. For large-scale operations, we can look at blending multiple sources of energy. But how do we solve the problem of a mid-sized farmer? We can solve it with a mini-grid using renewable energy.

          Comment: Every country needs a model to help optimise its energy transition

          If you go to a small farmer in a rural area, they don’t care about what source of energy they’re getting. They just want something that can help them get from A to B. If you look at the direct energy needs of farmers and food processors, I’m sure 90 percent of their consumption can be solved by renewable energy. Let’s start with that problem first. Then, as they scale, they might need to ramp up, and we can start talking about a bigger baseload.

          CHN: How much agricultural value is lost because farmers and food businesses lack reliable, affordable electricity?

          A: If you look at, for example, the fact that we need to maybe plant tomatoes or strawberries in Jos before it gets to Lagos [Nigeria], which most likely is by road, I can assure you that a good chunk, if not stored properly, would be bad by then. So the fact that we do not have energy is in itself a lost opportunity to maximise the potential of the agriculture sector. So until we’ve solved the energy problem, we will not salvage waste – and for me that is a lost opportunity.

          CHN: AGRA, an institution focused on scaling agricultural innovations to help smallholder farmers, estimates a massive shortfall between current investments in the continent’s food systems and what is actually needed to build a resilient, profitable agricultural economy – to the tune of $180 billion per year. Can integrating energy into food systems help bridge that gap?

          A: Yes – if energy can help unlock the potential to earn more money, investors will follow the money. Investments go where there is certainty, and until there is certainty around cash flow and revenue, investment will be limited.

          My vision is to see more Power Purchase Agreements (PPAs) being signed between energy players and the agriculture sector. We can start by getting people into the room, understanding their pain points, crafting a framework and documentation that works for both parties, and then seeing deals happen.

          This interview was shortened and edited for clarity.

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