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Monday, March 2, 2015

Why Ghanaians should be worried at ENI/Vitol $7b gas deal

President John Mahama wants Ghanaians to be excited at an oil and gas deal signed with ENI/Vitol for the development of the Sankofa gas field.

The agreement for the development of the Offshore Cape Three Points (OCTP) integrated oil and gas project – being undertaken by Italy's largest oil company, Eni Spa, in collaboration with Vitol Energy – is aimed at boosting Ghana’s gas supplies to secure the country’s energy and power sector.

“This investment is worth $7 billion and is reportedly the single biggest investment signed in recent history,” said the President in his State of the Nation Address to Parliament on Thursday.

Ghanaians should however be worried about this deal, says Dr. Mohammed Amin Adam, Executive Director of the African Centre for Energy Policy (ACEP).

According to him, “the $7 billion deal they signed with Ghana is badly negotiated; it’s everything for ENI, nothing for Ghana. The only thing Ghana can guarantee is that we’ll have gas to buy, other than that what?”

Revenue accruing from the oil and gas industry is dependent on the quality of contracts signed.

“Unless you have good contracts, you will not get much revenue and unless you have contracts that will lead to production, you will not get revenue,” observed Dr. Adam, in reference to recently signed contracts and processes in acquiring oil blocks.
 
He has acknowledged government’s share of potential proceeds from new oil contracts are progressively increasing. But there are doubts the new contracts will lead to oil discoveries because Ghana is not attractive to big players in the oil business.

“Those who have been given contracts are doing nothing on their blocks because most of them have no experience in upstream work; they don’t have money,” said Dr. Adam.

The Ministry of Energy and Petroleum has stated that the award of new petroleum contracts to eight foreign companies in 2014 was negotiated within the existing legal and regulatory framework of Ghana.

But the ACEP Executive Director says attracting big oil players in Ghana’s upstream sector will demand the disclosure of beneficiary ownership information in signing agreements, whilst providing “transparency and predictability” in the process.

“If you are not connected you cannot get an oil block and this is why we say government must adopt an open and competitive bidding process so that the companies that can give us higher value for our oil wealth, for our deposits, we give the contracts to them,” Dr. Amin Adam said.

Story by Kofi Adu Domfeh 

Paris climate deal leads African Ministers confab on environment

Egypt is hosting the fifteenth session of African Ministerial Conference on Environment (AMCEN) holding 2-6 March 2015 on the theme: "Managing Africa’s Natural Capital for Sustainable Development and Poverty Eradication".

The focus of the meeting is on harnessing Africa’s natural capital, taking into consideration the region’s diverse biodiversity and ecosystems.

This session is being held in a crucial year for global and regional action to secure our global future.

The meeting comes at the heels of the recently concluded 20th UNFCCC Conference (COP20) held in Lima and also at a time when the African Civil Society is gearing its momentum towards the 21st UNFCCC COP to be held in Paris, France.

The world is also engaged in critical negotiations that will lead to the adoption of a post-2015 development agenda, including a set of Sustainable Development Goals that will chart a path for the next generation of development.

The Pan African Climate Justice Alliance (PACJA), as a key actor, sees AMCEN-15 as an opportunity to contribute towards Africa’s sustainable development agenda.

PACJA has therefore organized a Pre-AMCEN Major Group and Stakeholders’ Forum to promote African governments and the civil society to work together, exchange experiences and strategies in order to carry the voice of African peoples forward.


“The selection of the 15th AMCEN Session’s theme resonates with this year’s spirit, where two most important global agreements which will determine the future resource governance, will be concluded,” said Mithika Mwenda of PACJA. “AMCEN has been a central player in these two processes, and as civil society, we will continue playing our role within the limits of the space we have been accorded”.

On the road to Paris, the Pre-AMCEN forum is framing the narrative of green economy in the context of sustainable development, poverty eradication and ensuring African issues are reflected in Post 2015 Agenda/consultations.
African CSOs expect the Conference to define a concrete blueprint that will guide the continent to discussions on the SDGs.

“We want to crystallize a strong position when it comes to climate change and Sustainable Development Goals (SDGs); we want to link environment with economy; we want to work on poverty eradication and job creation for our young population,” said Dr. Khaled Mohamed Fahmy Abdel Aal, Egyptian Minister of Environment.

Stakeholders have expressed concerns that Africa is now more than ever before experiencing adverse consequences of climate change.

“Annual temperature is consistently increasing; we need to keep temperature lower than two degrees. For adaptation only we need between $7-15billion. If the trend continues, by 2050 we will need $100billion,” observed Mounkaila Goumandakoye, Director and Regional Representative, UNEP-ROA.


AMCEN is a permanent forum where African ministers of the environment discuss matters of relevance to the environment of the continent.

Switzerland submits its Climate Action Plan ahead of Paris 2015

Switzerland has become the first Party to the UN Framework Convention on Climate Change (UNFCCC) to submit its new climate action plan.

Switzerland’s Intended Nationally Determined Contribution (INDC) comes well in advance of a new universal climate agreement to be inked by governments at the UN climate conference in Paris in December.


The new agreement will come into effect in 2020 and will pave the way to keep a global temperature rise this century under 2 degrees C.

Governments have agreed to submit their INDCs in advance of Paris with many developed and bigger developing countries expected to do so in the first quarter of this year.

The news from Switzerland comes in the wake of a meeting in Geneva where countries also finalized the negotiating text for the Paris agreement. The next round of formal negotiations will take place at UNFCCC headquarters in Bonn, Germany in June.

INDCs have been chosen as the vehicle for national contributions to the international Paris agreement–they include for example details of emission reductions the country will undertake and can include other action plans covering for example adaptation.


Christiana Figueres, Executive Secretary of the UNFCCC said: “Switzerland is today demonstrating leadership, commitment and its support towards a successful outcome in Paris in 10 months’ time–it is the first but will not be the last. Momentum towards Paris is building everywhere. I look forward to many more INDCs being submitted over the coming weeks and months.”

Countries have agreed that there will be no back-tracking in their contributions. This means that the level of ambition to reduce emissions will increase over time.

The negotiating text from Geneva also signals the ambition among many governments for a long-term goal to dramatically reduce greenhouse gas emissions over the century.

Thursday, February 26, 2015

Governments on Track to Reaching Paris 2015 Universal Climate Agreement

Another key step towards a new, universal climate change agreement has just been taken as the negotiating text for the agreement was officially issued by the UN Framework Convention on Climate Change.

The text was agreed at the UN Climate Change Conference in Geneva earlier this month, and covers the substantive content of the new agreement including mitigation, adaptation, finance, technology, capacity building, and transparency of action and support.

“I’m delighted that the negotiating text from which the Paris agreement will be constructed has now been officially published. This will allow early consideration of the text on the part of governments,” said UNFCCC Executive Secretary Christiana Figueres.

The negotiating text will be formally communicated to all governments that are Party to the Convention as soon as it becomes available in all six official languages of the UN.

The expectation is that this could be achieved by the end of March, thus amply fulfilling procedural requirements for adoption of the agreement at the end of the year.

This milestone kick-starts a year of intense negotiations and political efforts focused on completing the new agreement and building broad-based momentum across all levels for a unified and lasting response to the
challenge of climate change.

“I welcome the broad-based engagement of Heads of State and Ministers ranging from finance to health to energy. The new agreement will not only be of relevance to Ministers of environment, but will be of key relevance across all government ministries and departments committed to the triple intertwined agendas of 2015: namely climate action, the realization of a suite of Sustainable Development Goals and progressing on disaster risk reduction,” Ms. Figueres stated.

Negotiators will reconvene at the Climate Change Conference in Bonn from 1 to 11 June to seek convergence, find ways to bridge positions and reach common understandings.

“The June session will be of crucial importance,” Ms. Figueres said. “I would like to call on all governments to empower their negotiators to come prepared to make choices in June and to converge on outcomes all Parties can accept,” she added.

Additionally, negotiators will identify elements within the negotiating text that are of a durable nature and therefore need to be enshrined in the agreement, and aspects that are more suitable to be contained in decisions at the UN Climate Change Conference in Paris.

This could mean, for example, that the establishment of a mechanism that boosts the response to climate change would be enshrined in the agreement, but the details of how this mechanism would operate would be captured in an accompanying decision.

Following the June conference, two further formal sessions have been scheduled in Bonn, from 31 August to 4 September and from 19 to 23 October.

Meanwhile, the 15th session of the African Ministerial Conference on the Environment (AMCEN) holding in Cairo, Egypt from 1-6 March, will provide an opportunity for ministers and experts to review and analyse the outcomes of the twentieth session of the Conference of the Parties to the United Nations Framework Convention on Climate Change (UNFCCC COP20) that held in Lima, Peru in December 2014.


The on-going climate change negotiations have entered a critical stage towards the 2015 legal agreement and this session will be an opportune platform to review issues at stake for the continent and agree on a roadmap in preparation for the twenty first session of the UNFCCC (COP21) to be held in Paris later in the year.  

Audio Report: When the last cocoa tree dies

Cocoa, the second largest foreign exchange earner for Ghana, is indeed the cash-cow of the Ghanaian economy.

Recently, the Ghanaian government increased the producer price of the commodity to the excitement of local cocoa farmers.

But the cocoa industry is reeling under the threat of climate change and could as well be a major driver to deforestation.

Increasing production demands expansion of area under cultivation, with the resultant effect of converting forests to farming systems which leads to decline in carbon stocks.

To sustain production, there is the call for the country to explore climate-smart cocoa production practices.


Kofi Adu Domfeh takes a look at what Ghana is doing to ensure the cocoa economy and local livelihoods are sustained.

Listen to audio report...



Tuesday, February 24, 2015

Ghana’s Kuapa Kokoo meets scientists in UK to learn future of chocolate

A £1m specialist facility has been created at Reading University in UK to protect and preserve over 400 different varieties of the cocoa plant. 

The facility should allay concerns of recent media coverage predicting world cocoa shortages.

The International Cocoa Quarantine Centre (ICQC) at Reading University will be responsible for collecting new cocoa seeds and facilitating research into breeding plant varieties that will be more resistant to disease.

In their greenhouses, they will be quarantining the seeds from all new diseases and pests, and growing healthier, more reliable plants in a hydroponic growing system.

The plants there are used to supply Ghana and other major cocoa producers, as well as some of the smaller newer producers like Vietnam.

Secretary of the Kuapa Kokoo Farmers Union, Appiah Kwarteng, and Emmanuel Arthur, Managing Director of Kuapa Kokoo Limited have been guests of the ICQC. 

They were in the UK for the Board Meeting of Kuapa’s chocolate company, Divine Chocolate, and spent some time with Director of the ICQC programme, Dr Andrew Daymond and Michelle End of the Cocoa Research Association.

The visit provided a nice opportunity both to explain the work that we are doing at the University of Reading to Ghanaian cocoa farmers, but also to learn more about the projects that Kuapa Kokoo are involved in," said Dr Daymond.

The two Kuapa Kokoo representatives were impressed with the facility and the project. “It’s good to know a place like this exists,” said Mr Arthur.  “We need to take this up seriously – buyers want to know how we are helping the farmers to improve production and increasing our volumes – they want to know we are a sustainable business”.

He heard that the ICQC is partnering with the MMSP breeding programme in Mabang  Megakarya, and he expressed an interest in liaising with them.

Kuapa farmer and KKFU Secretary, Mr Appiah Kwarteng was keen to know how it can improve Kuapa members’ yields and future sustainability.

“I am very pleased to see this research being done, and it would be interesting to see more of these species coming to Ghana,” he said. “It will be good if the results of this research are made available to us farmers. We hope that Kuapa can benefit,” he added.


The visit to ICQC was arranged by Divine Chocolate.

Community Action for Yam Seed Project to increase food security in Ghana and Nigeria

Smallholder farmers in Ghana and Nigeria are being supported to improve on the quality of saved seed yam for higher productivity.

The Community Action for Yam Seed (CAY-SEED) Project is aimed at increasing food security and wealth creation by addressing some of the major limitations to yam production.

The three-year project is targeted at improving the quality and productivity of 3,000 smallholder farmers through innovative agricultural interventions in eight major yam growing communities in Ghana and Nigeria.

It is being implemented by the Crops Research Institute (CRI) of the Council for Scientific and Industrial Research (CSIR) and partners, with a $3.5million funding from the Bill and Melinda Gates Foundation – the CSIR-CRI is making $0.5million additional in-kind contribution.

Seeds are key component in the drive for food security and sustainability, especially in these times of climate change and its impact in agricultural production. Availability of yam seed constitutes as much as 50% of total cost of yam production.

“Coupled with this is the poor quality of available seed yam; damage from nematodes, viruses, tuber rots and bacterial infections are major contributions to the poor seed quality and yield reductions in yam,” observed Dr. Stella Ennin, Project Leader and Director of the CSIR-CRI. “This partnership intervention is therefore vital to raise the level of seed yam production in Nigeria, which is the lead producer of yam in the world, and Ghana, which is the leading exporter of yam in the world”.

The Bill and Melinda Gates Foundation (BMGF) considers the CAY-SEED grant as a “critical investment”.

“We identified seed systems as one of the primary constraints across cassava, sweet potatoes, bananas and yam; all the crops that we invest in,” noted Claire Kpaka, an Associate Program Officer at the Foundation. “For us, we see CAY-SEED as an important opportunity to demonstrate to farmers the best practices in maintaining clean seed at their own farm level.”

Whilst commending development partners for the support for agricultural development, Dr. Ennin pleaded with the Ghanaian and African governments “to provide the needed support to agricultural research and development to realize African government’s vision as enshrined in the New Partnership for Africa’s Development (NEPAD), of making agriculture the vehicle for economic transformation on the continent”.

Ashanti Regional Minister, Samuel Sarpong, addressing the project launch, acknowledged it is only through research that problems of low crop yield would be addressed.

According to him, the government of Ghana with the support of the International Fund for Agricultural Development (IFAD) and the World Bank is making significant strides in addressing the challenges faced by research into the crop.


Story by Kofi Adu Domfeh

‘Mental health is a right and not a privilege’

Frederick Ampong is excited at his volunteering role to support mental health patients in his local community at Bekwai Ahwiaa within the Bekwai municipality of the Ashanti region.

For him, ‘mental health is a right and not a privilege’, hence his commitment to advocate against stigmatization of mental health patients.

“When I realized patients can get better when they take their medication, I was happy to help in educating others; we’ve engaged in several activities and by God’s grace, a lot of people who by taking their medication have recovered,” he stated.

Frederick is among volunteers and self-help groups trained in various communities under the Mental Health and Development Programme.

The Programme, implemented by the Centre for the Development of People (CEDEP) in collaboration with BasicNeeds Ghana, is working to ensure people with mental health illness and epilepsy are able to live and work successfully in their communities.

“We are looking at a situation where people will not be sent to institutions but will be kept in communities, to access healthcare facilities from district hospitals where mental health units are being established,” stated Michael Bosompem-Twum, programme officer at CEDEP.

Five districts have benefitted from the project since inception in 2011 – including Bekwai Municipal, Amansie West, Adansi South, Ejura Sekyedumase municipal and Tafo sub-metro in Kumasi. It’s being scaled-up to all districts of Ashanti region.

According to Mr. Bosompem-Twum, targets set under the first phase of the project have been exceeded in Ashanti – close to 1,700 patients have been reached in the past four years. 

The volunteers and self-help groups are seen as critical stakeholders to sustain the programme due to their interest in community development.

They have being undergoing continuous skill training to devise strategies to manage mental health cases, including follow-ups on patients to administer their medication, identification of patients in communities and make referrals of patients to health facilities.

The second phase of the Programme is supporting the government to build a National Mental Health System that effectively and efficiently responds to the mental health needs of the population.

“Mental ill-health should be seen as equally important,” said Fred Nantogmah, the communication and information officer of Basic Needs Ghana.

The project, funded by DFID, seeks to decentralize mental health treatment services and to make it a community- based activity.

Challenges faced by the volunteers include inadequate logistics, especially transportation to ease mobility in rural communities.

Story by Kofi Adu Domfeh 

Friday, February 20, 2015

The experience of sustainable energy and development in Ghana

Construction permits have been issued to a number of solar investors, with an expected 80-100MWp of solar PV power plant to be completed and connected to the national grid in 18months, the Ghana Energy Commission has stated.

Site permits have also been issued for wind and wave power, whilst provisional licenses have been issued to investors interested in producing power from biomass and wastes, totaling 424MW.

“Installation of the first turbines of 1000MW wave energy farm has commenced at Ada and we expect the first electrons flow from the plant within two months,” said Dr. Alfred Ofosu Ahenkorah, Executive Secretary of the Energy Commission.

Ghana’s local manufacturing sector and industries are collapsing due to the inability of the energy sector to meet their electricity needs.

Dr. Ahenkorah says sustainable energy development means looking at indigenous resources, including renewable energy. These resources include woodfuel – charcoal and firewoods, solar and wind energy.

The use of firewood cookstoves creates jobs for artisans along the cookstoves value chain – producers of liners and fabricators of stoves, distributors and retailers. Woodfuels could also be used as fuel for electricity generation.

“One could cultivate wood plantations, manage existing forest and even forest reserves and use the wastes, dead branches and fruits as fuel for biomass power plants,” stated Dr. Ahenkorah.

He spoke on: “Energy and Sustainable Development: the Ghanaian Experience” at the 2nd International Economics Conference in Kumasi, organized by the Department of Economics at the Kwame Nkrumah University of Science and Technology (KNUST).

He acknowledged that “improved access to sustainable energy services in Ghana has a great potential to create more jobs, improve lives, reduce the cost of goods, generate revenue for government and stabilize the local currency.”

Sustainable energy development, he noted, rests on the three pillars of environmental and socio-economic integrity as well as energy security, without which there would be no meaningful development.

“The Ghanaian economy is currently unable to supply the needed energy for growth and development. Even though Ghana is endowed with rich and natural sources of energy such as petroleum, river bodies, forest and solar, other factors of production are needed to ensure sustainable use of these natural resources,” said Dr. (Sr.) Eugenia Amporfu, Head of the KNUST Department of Economics. The factors, she said, include labour, human and physical capital as well as entrepreneurial ability.

The Energy Commission is currently reviewing and updating existing policies and plans to steer the country towards the sustainable development, management and utilization of both renewable and nonrenewable energy sources to support economic growth of the country.
 
Dr. (Sr.) Amporfu, has called for partnership from both the public and private sectors to tap into the “rich brains” at the department as they work towards creating a research centre.

Story by Kofi Adu Domfeh

Gas field projects in Ghana to delay if oil prices keep dropping

The Ghana Energy Commission has observed completion of indigenous gas field projects would delay if global oil prices keep dropping.

The country is expecting indigenous gas from the TEN fields in 2016 and the Sankofa field in 2017. These projects will boost the country’s oil and gas production when completed.

However, Executive Secretary of the Energy Commission, Dr. Alfred Ofosu Ahenkorah, says the country should hope for a reverse in the current drop in oil prices and expect the average price pushed to at least $80 per barrel.

Oil prices have dropped more than 50percent in recent times, currently trading at less than $50 per barrel.

Dr. Ahenkorah explained that “the economics of both projects were based on an average oil price of $80 per barrel”, hence developers may need to revise their appraisals.

The Tweneboa-Enyenra-Ntomme (TEN) fields are located in the Deepwater Tano licence which covers an area of more than 800 sq km, and lies around 20km west of Tullow’s Jubilee field.

The Sankofa-Gye-Nyame gas fields have an estimated reserve of 1.15 trillion cubic feet.


Story by Kofi Adu Domfeh 

Wednesday, February 18, 2015

Climate talks produce first draft for possible Paris Agreement

The first negotiation session of UN talks on climate closed in Geneva with an increasing focus on the need for immediate action on climate change.

The talks produced the first draft of a possible "Paris Agreement" which will be negotiated throughout the year, before being finally agreed in the French capital in December.

The final day of talks were heated over exchanges about 'carbon markets' and as hundreds of organisations from across the world warned of risks to the right to food if misguided policies on land use and climate are applied.

Lidy Nacpil, coordinator of Jubilee South Asia Pacific Movement on Debt and Development, in a briefing to the press, quoted the letter saying, "land is essential for our food and our livelihoods. It is the basis of our communities, our cultures and our spiritualities... We cannot allow policies and actions that will further threaten peoples' rights to food, to land and the commons."

Commenting on other areas of interest at the negotiations, observers like Asad Rehman, Head of International Climate, Friends of the Earth (EWNI), noted that "Geneva drew a line in the sand between those governments who are taking the warnings of climate science seriously, and are looking to protect the wellbeing of their citizens and those who seem more interested in protecting short term 'business as usual' interests”.

Those that recognize the urgency of the climate crisis, he observed, demanded concrete steps to increase action in the critical pre-2020 period through stronger targets, more finance and technology transfers and by focusing on transforming our polluting energy system.

“The outcome is still up in the air but it's clear that deeper emissions reductions in the short term will need to be part of any effective agreement in Paris," said Asad.


"Africans are increasingly worried about some of the so-called climate 'solutions' that are proposed here. Some of these failed experiments like soil carbon markets and land use in mitigation are thinly disguised code for incentives to grab up African land as we have seen happening over the last couple of years,” stated Mithika Mwenda, General Secretary of the Pan African Climate Justice Alliance (PACJA). “Governments must learn from the biofuels disaster and stop such proposals in their tracks." 

Tuesday, February 17, 2015

The future concern is no longer about energy security but climate change

The global movement of campaigners for clean energy is growing at a fast pace.

The aim is to increase the pressure on institutions to divest from the top 200 fossil fuel companies that are at the source of the climate crisis.

On February 13-14, 2015, the fossil fuel divestment movement came together for the Global Divestment Day of action to further de-legitimize the fossil fuel industry.

From South Africa to Australia, campaigners gathered to raise awareness at universities, cities, banks and religious institutions about the threat of a carbon bubble.

A commitment to decarbonize economies and transition to a 100% clean energy future by 2050 was also a vociferous subject at the climate change talks in Lima, Peru.

The decarbonization target is currently in the draft text of the climate agreement – close to 90 countries have voiced their support for the inclusion of a zero-emission target.

But there are fears fossil fuel companies and polluting countries will lobby furiously to get it removed before a deal is signed in Paris.

In Lima, a network of NGOs in Africa staged a campaign against funding for dirty energy, which involves the exploitation of the earth’s resources, especially petroleum, at the expense of the health and economic livelihoods of low-income communities.

They were loud in their words: “Stop Funding Dirty Energy”; as they cautioned countries like Ghana whose economy depends on the extractives industry.

The campaigners believe burning any fossil fuel for economic expansion is bad for the climate. They therefore want a stop to fossil fuel use by 2050 and attention turned to renewable, efficient energy use.

The African Group of Negotiators (AGN) proposed the Global Renewable Energy Partnership, in line with the UN Secretary-General’s sustainable energy for all initiative, launched in 2011.

Ghana’s oil industry is relatively young but country is hoping in rake in huge foreign exchange from the sector to fund its infrastructural development projects.

However, US-based Ghanaian researcher in sustainable biofuels, Prof. Akwasi Boateng, says the future concern of the country should no longer be about energy security but climate change.

According to him, an efficient policy framework and adequate State funding would induce research into alternative fuels that are sustainable and environmentally friendly for the Ghanaian economy.

“It’s no more energy security; it’s about the climate change,” said Prof. Boateng. “So if you use the fossil fuel, you have a depletable resource; it’s not renewable, you emit carbon dioxide which is not replaceable, so it’s not useful”.

Prof. Boateng is promoting the production of energy from carbon-neutral renewable energy resources, especially biomass, which involves the use of plant materials, including wood and grass.

Activists are increasingly calling on their institutions to not only divest from the fossil fuel industry, but reinvest their money in just and sustainable energy solutions, with a particular focus on initiatives that support communities most impacted by climate change and the dirty energy based economy.

Through divestment, activists in the Global South are also looking to challenge existing development policies tied to continued exploitation of fossil fuels at the expense of protecting people and planet.  

“The existing high carbon development model largely benefits powerful industries and the wealthier segments of society while poor and vulnerable communities continue to carry the brunt of climate impacts” said Yossi Cadan, Global Divestment Senior Campaigner for 350.org. “We know climate change is the biggest global threat of the 21st century leading health organisations to join the call for divestment.”

The Centre for Renewable Energy and Energy Efficiency at the Kumasi Polytechnic is building local human resource capacity to harness the country’s renewable energy potentials.

“Harnessing this type of energy will lead to job creation, energy security, cleaner environment and sustainable development”, stated Rector of the Polytechnic, Prof. Nicholas Nsowah Nuamah.

Fossil fuel is a finite resource, which once exploited it takes hundreds of years for new formation to take place.

“The effects of a warming planet of which all of us bear witness to; flooding, rising sea levels, melting glaciers, have been largely attributed to the over exploitation of fossil fuel,” he said.

A Technical University of Kumasi to be sited at Kuntenase in 2016 will be self-sufficient in energy using renewable energy.

The Global Divestment Day builds on the momentum from last September’s People’s Climate March, which brought together over 400,000 people in the streets of New York City and hundreds of thousands more around the world.

Organizers see divestment as a key strategy in the lead up to the UN Climate Talks in Paris, as well.


Story by Kofi Adu Domfeh

Oil and Gas explorers must rethink their exploration spending in Africa

Oil and gas explorers must rethink their capital expenditure on exploration activity across the African continent in the wake of the significant drop in the global oil price, according to an analysis on the oil & gas industry in Africa released by PwC.

“Oil & gas explorers will be relooking at their budgets and deciding where to allocate their limited capital spend given the substantial decline in the oil price. Overall, low oil prices could have an impact on production undermining certain players in the market,” warns Chris Bredenhann, PwC Africa Oil and Gas Advisory Leader.

The WTI price for crude oil recently plunged below US$49 per barrel, following wide-scale reports of oversupply in the US. Current reserves are reported in the press to be at their highest level in the past 80 years.

According to PwC’s ‘Fit for $50 oil in Africa’ analysis, Africa has seen substantial successes in the exploration for hydrocarbons over the last decade including the entry of new country players with East Africa, joining the ranks of their West African neighbours. 

In 2013 alone, six of the top 10 global discoveries by size were made in Africa – including some of the largest discoveries in the last decade in East Africa.

The key to surviving the ups and downs of the cyclical oil & gas market is to learn how to adapt quickly – be more agile!  

“Oil & gas companies now need to plan for the upturn that is sure to follow to ensure that the potential boom does not go bust,” adds Bredenhann.

The drop in oil prices is expected to have a significant impact on Africa, which has been grappling with the effects of long-term poverty, food shortages, HIV/AIDS, and more recently the outbreak of the Ebola virus in West Africa.

The challenges facing oil & Gas companies in Africa continue to be diverse and numerous fuelled by regulatory uncertainty, fraud and corruption, poor infrastructure, and a lack of skilled resources, among others.

Furthermore, Africa has one of the highest average finding costs in the world at a massive $35.01 per barrel in 2009 surpassed only by the US offshore fields which came in at $41.51 per barrel, according to the US Energy Information Administration.

Africa also holds a number of technically challenging hydrocarbon prospects. Examples include deepwater sub-salt exploration activity in West Africa, waxy oil in Uganda as well as offshore exploration leases in South Africa.

Bredenhann says: “While oilfield service companies will venture to cut back on spending, they will also be under extreme pressure by the oil companies to drop their prices.”

According to the analysis, the following oil & gas players in the market are expected to be most likely at risk from the drop in the oil price: frontier areas, host governments, major gas projects and oilfield service companies.

Frontier areas around the world are expected to suffer from delayed development in the near-term. These include technically difficult projects that require more spend than conventional production such as deepwater, sub-salt, shale gas and enhanced oil recovery ventures.

Countries that may see frontier project delays include offshore South Africa, sub-salt Congo and Angola, offshore Tanzania and shale gas in South Africa. Shale gas, in particular, could move forward if the gas price were not 100% fully-indexed to oil.

It should be noted that oil companies do not make their investment decisions based on short-term, cyclical price changes but rather on wider price trends given the long-term nature of these investments. 

Major African gas projects are also expected to be under increased scrutiny, as oil-linked LNG prices have dropped significantly.  “While we don’t envision that the major LNG projects in Mozambique and Tanzania will be cancelled outright,  costs are a major concern for investors,” Bredenhann says.

At this time, governments would do well to place regulatory, legislative and fiscal policies in order so that they are seen as attractive regimes when the price recovers.

Oilfield service companies will be hit hard globally, but Africa may be an especially vulnerable portion of their portfolios, states the analysis. Africa could pose further challenges due to difficult logistics and the lack of infrastructure. Overall exploration costs have already decreased significantly due to cost pressures, in particular seismic surveying and drilling. This is expected to lead to idle rigs as well as delayed and potentially cancelled projects.

However, not all is doom and gloom. There are still numerous opportunities to invest in the industry within Africa. The greatest opportunity seems to lie within onshore exploration. There are still risks, but onshore exploration is also significantly cheaper. Tullow Oil has certainly taken note of this opportunity as it has announced that it plans to drill six basin openers in onshore Kenya during 2015.

Aside from exploration, some players are moving ahead with development programmes, even though they have no plans to expand with exploration drilling. “We also see that there could be significant potential for firms that are strong in R & D,” adds Bredenhann. Lastly, there is opportunity for new players with strong balance sheets to enter the African market, potentially at a low cost.


A number of issues must, therefore, be addressed. This can be done by starting with an organisational stress test including strategic, financial, operational and commercial elements. In situations of low commodity prices, many companies respond with knee-jerk cost reduction programmes. This could be more effective if they took the time to understand what specific costs are, how they compare to peers and what reductions are truly possible. Cost reduction programmes need to be targeted and realistic,” concludes Bredenhann.

Thursday, February 12, 2015

Sustainable Development Goals need more quantifiable targets to succeed – report

The Sustainable Development Goals (SDGs) will struggle to achieve their stated policy objectives without clearer, more quantifiable targets.

This is contained in key findings of a new report which provides a scientific critique of the SDGs, focusing on the targets under the 17 goals which are intended to guide and define the global development agenda from 2015 to 2030, following on from the Millennium Development Goals.

The report, coordinated by the International Council for Science (ICSU) and the International Social Science Council (ISSU), is timed for publication in advance of the first significant UN meeting of the year on SDGs which starts Feb 17.

It says that of the 169 targets beneath the 17 draft goals,  29% are robust, while 54 % need more work and 17% are weak or non-essential.

The report is the work of 40 leading researchers in a range of fields including epidemiology, economics and climate research.

The authors find that overall the SDGs offer a “major improvement” over their predecessors, the Millennium Development Goals.

However, the targets suffer from repetition, a lack of integration, and rely too much on vague, qualitative language rather than hard, measurable, time-bound, quantitative targets.


For example, on sustainable consumption and production, while the goal is essential, “targets appear too ambitious to be fulfilled.” And on inequality, the proposed targets are “relevant but inadequately developed. Most are framed as activities rather than endpoints.”

Wednesday, February 11, 2015

Private initiative to recover 50% of degraded forests in Ghana

A new private sector Tree Investment Policy (TIP) should see 50 percent of Ghana’s degraded forest reserves recovered by 2050 and contribute to the global drive at climate change mitigation.

The ambitious goal is set by Vision 2050 Forestry Ghana, which already has 150million trees of different species in 850 communities in Ghana since it started work in 1988 as a non-governmental organization.

The annual rate of forest depletion in Ghana is increasing alarmingly, with over 85 percent of the forests already depleted. Livelihoods are threatened as the changing climate has exacerbated water bodies drying up, draught and faming as well as diseases rising.

The TIP will convert 200 thousand trees into cash to enable the company provide financial assistance to its network of farmers and cultivate one billion trees in five years, says Shelley Snell, CEO of Vision 2050 Ghana.

Officials say part of the money raised will be used to process lumber for domestic and international consumption as well as provide sustainable briquette charcoal for domestic use.

“As an investment plan, TIP will allow 50 women, 20 men and five corporate bodies the opportunity to contribute $50 per tree and earn $500 in the fifth year through the tree lease and buy back agreement”, explained Shelley Snell. The minimum investment is 100 trees.


The organization engages folks in rural communities, with a target of reducing unemployment – currently has a network of 300,000 farmers spread across the country.

“Tree planting is such that you don’t reap the benefits in time and it came to a time when farmers nearly gave up the tree planting”, observed Adjei Mohammed, a farmer at Wassa Akropong on the Vision 2050 Ghana programme.

Following series of sensitization engagements, the farmers have a renewed interest in agroforestry and Mohammed is hopeful the company will protect the interest the farmers.

Researchers have predicted that fluctuation in the level of precipitation in the range of 5%-20% is as a result of human activity, which includes indiscriminate cutting down of trees.

Tree planting is a means to reduce the concentration of carbon dioxide in the atmosphere to slow the rate of global warming.


Story by Kofi Adu Domfeh

Monday, February 9, 2015

Fossil Fuel Divestment Campaign to hold Global Day of Action

The Fossil Free campaign, which has spearheaded the movement to divest from fossil fuels since it began in 2012, will hold a Global Divestment Day spanning six continents on February 13-14.

Global Divestment Day will celebrate the incredible growth and increasingly international reach of the fossil fuel divestment movement.

By 2014, 180 institutions had divested citing climate or carbon risk as their motivation. There are now over 500 active divestment campaigns underway at universities, cities, churches, banks, pension funds and other institutions.

“The divestment movement is already making a huge impact,” said May Boeve, Executive Director of 350.org, one of the organizations supporting the divestment effort. “In just two years, this campaign has grown from a few universities to hundreds of institutions around the world. Together, we’ve succeeded in challenging the social license of the fossil fuels industry, and begun to chip away at their political power. Global Divestment Day will celebrate this success, and help launch a new chapter of this growing movement.”
 
The divestment campaign highlights a conflict that most politicians are reluctant to address. If the world is to avoid catastrophic global warming, most known fossil fuel resources need to stay in the ground. As world leaders plan to gather in Paris later this year to attempt once again to secure a global deal to address the climate crisis, divestment provides the means to take back power from the fossil fuel industry and deliver a mandate for bold climate leadership before it’s too late.

“On Global Divestment Day we will be sending a clear message to the world: now is the time to end the age of fossil fuels,” said Payal Parekh, Global Managing Director for 350.org.  “Instead of funding the problem, we need to start funding solutions in the form of clean, renewable sources of energy. This is the only real solution to overcoming the climate crisis”.

On February 13-14 worldwide actions will include: individuals closing their accounts with banks and pension funds investing in climate chaos; university students holding flash-mobs, vigils, sit-ins and rallies calling upon their endowments to invest in a liveable future, faith leaders and people living on the frontline of climate change will band together to urge their communities to divest from climate destruction.

In the financial capitals, people will gather for colourful rallies calling on investors to break up with the fossil fuel industry and sever their ties once and for all.

Hundreds of events are now planned worldwide for Global Divestment Day in 48 countries spanning 6 continents.


Clean energy campaigners were loud at the COP20 in Lima, Peru.

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