Germany will invest 4 billion euros in green energy projects in Africa until 2030, Chancellor Olaf Scholz said on Monday, noting these could in turn help Europe’s largest economy achieve its own transition to carbon neutrality.
Germany will need to import large quantities of green hydrogen going forward, including from Africa, if it is to achieve its goal of net zero emissions by 2045, he said at a German-African business forum in Berlin.
The forum preceded a summit of the “G20 Compact with Africa” that aims to drum up investment in the world’s poorest but fast-growing continent by coordinating the development agendas of reform-minded countries and identifying business opportunities.
“Hydrogen production requires considerable investment at the start, so clear signals for a long-term and durable cooperation are needed,” said Scholz, who has made five trips to Africa since taking office in late 2021 in a bid to increase engagement with the continent.
“The Compact with Africa conference aims to send this signal: You can count on Germany as a partner”.
The 4 billion euros would be channelled into the common EU-Africa Initiative for Green Energy. The European Union had already announced it would deliver it 3.4 billion euros in grants.
African countries have long complained that while Europe talks about investment, China actually provides financing without any moral lecturing. Still, Chinese lending in Africa is in decline, while European interest is rising.
Indeed the West is increasingly jostling with China and Russia for geopolitical influence, critical minerals and new economic opportunities in the continent.
“The global order is shifting and Europe and Germany can not just sit on the sidelines,” Finance Minister Christian Lindner said after meeting with his counterparts from several African countries at the conference.
The summit of the G20 Compact with Africa on Monday was its fifth since its creation in 2017 under the German G20 presidency and convened the leaders of more than a dozen African states.
German trade with Africa was 60 billion euros ($65.4 billion) last year, which is a fraction of its trade with Asia but up 21.7% on 2021.
Ivory Coast President Alassane Ouattara said the number of German companies had tripled in five years while Morocco’s Prime Minister Aziz Akhannouch said German investment had increased sixfold since 2015.
The member countries of the G20 Compact are Morocco, Tunisia, Egypt, Senegal, Guinea, Ivory Coast, Ghana, Togo, Benin, Burkina Faso, Rwanda, Democratic Republic of Congo and Ethiopia.