How Africa and Europe Can Both Benefit from "Green Deals"

Since time immemorial, Africa’s resources have been in demand worldwide, with colonialism marking the peak of exploitation and one-sided profiteering. While the demand for oil, gold, diamonds, uranium, coltan, cobalt, farmland, and more continues unabated, the world’s interest in Africa is increasingly driven by other reasons as well. The continent holds about 40% of the global, as yet untapped, renewable energy potential, making it a key player in decarbonization.

In South Africa, Tunisia, Morocco (see Handelsblatt article), and Namibia, for example, billions of U.S. dollars are currently being invested in the Hyphen Hydrogen Energy project to produce green hydrogen using solar, hydro, and wind power plants. This hydrogen is to be transported to Europe in the form of ammonia.

A recent report by the Africa-Europe Foundation, which was founded by the Mo Ibrahim Foundation, highlights the opportunities these so-called “green deals” offer for societal development. In theory, two partners have come together here who can solve their problems with the help of one another.

Europe’s Interest and Africa’s Opportunities

Europe is under pressure to meet its climate targets and reduce its dependence on fossil fuels, which are particularly extracted in countries that have little to do with democracy and good governance. Since the production of green energy within Europe is limited by geographical and infrastructural constraints,

African countries are coming into focus.Africa, in turn, can benefit from investments, for example through:

• the creation of new jobs

• local value creation

• the expansion of industrial capacities

• the use of renewable energy for local needs

Over 600 million people in Africa still lack access to electricity – projects with industrial demand for green energy could therefore help build infrastructure more cost-effectively through economies of scale. Africa’s population is also growing rapidly and moving to cities, increasing energy demand. Clearly defined strategies can help ensure that this development goes hand in hand with progress rather than exploitation.

What African States Need to Pay Attention To

The report makes several urgent appeals to African governments and decision-makers. Key recommendations from the report include:

1. Focus on regional and local demand, not just exports. Africa should ensure that a portion of production from new green energy projects benefits local and regional markets to avoid energy poverty and deindustrialization.

2. Build local industrial value creation. Investments in renewable energy and green industries must be coupled with the development of African supply chains, jobs, and technology transfer – not just raw material exports.

3. Ensure fair partnerships with Europe. Europe and Africa should focus on competitive interdependence rather than asymmetrical relationships. Contracts should be designed so that both sides benefit, with transparent governance and long-term stability.

4. Strengthen infrastructure and financing strategically. Expand power grids, ports, railways, and storage solutions, combined with financial instruments that make investments more affordable for African states.

5. Create political stability and regulatory clarity. African states should establish stable and reliable frameworks so that projects are not only announced but also implemented.

6. Share risks between Africa and Europe.I nstead of Africa only acting as a raw material supplier, both sides should invest together in research, pilot projects, and market development.

Green Deals Can Promote Economic Diversification

From Europe’s perspective, increased cooperation in renewable energy is obvious. In particular, the power of the sun is unmatched, enabling widespread, affordable, and naturally environmentally friendly energy locally. Using excess capacity to produce, for example, green hydrogen is smart and does not deplete Africa’s resources. If Africa becomes Europe’s “green energy hub” rather than relying solely on the export of its raw materials, this contributes to the necessary diversification and development of its economies.

This must happen on an equal footing, for the mutual benefit of Europe and Africa. Only in this way can green growth become genuine progress.