Green energy projects in Africa are hindered by IMF loan constraints.

Renewable energy investments in Africa are being hobbled by insufficient government loan guarantees, as the International Monetary Fund keeps a tight leash on country indebtedness, TotalEnergies CEO Patrick Pouyanne said Wednesday.

Pouyanne said currently electricity projects in Africa suffer from “a problem of solvency… you have a risk not to be paid”. “So when a renewable developer wants to develop, and it’s obvious you have huge potential, he will go and see the government and ask for guarantees,” he said.

“But the African governments, they will tell you, are not able to give these guarantees because the IMF is coming and telling them, ‘don’t go and give these guarantees, you are already over-indebted’.” 

Pouyanne said the result was that in Africa, his company was largely limited to business-to-business mining projects because it is an industry where they know they will receive payment.

TotalEnergies has oil and gas operations in 30 African countries, plus two solar parks in Egypt, and plans for a solar power and battery storage project in South Africa to come online in 2025.

By the end of 2023, its installed capacity for renewable energy projects worldwide amounted to 22 gigawatts (GW), with the majority of these oil majors situated in Latin America, Eurasia, the United States, and the Middle East.

The remarks were spoken at a government-industry discussion on Africa and renewable energy that was organized by the International Energy Agency. “I am disappointed not to see … a real international financial body to counter guarantee all these African states — and not to ask them more than what we are asking,” Pouyanne stated.

The French company decided to entirely self-insure the project to prevent adding to the government’s debt, he claimed because the international financiers for TotalEnergies’ 1 GW solar plant in Iraq were requesting greater loan guarantees from the Iraqi government than TotalEnergies itself.