PwC’s Africa Oil and Gas Review 2020 anticipate that the global transition to renewable energy will accelerate rapidly throughout the coming decade, causing exponential disruption as well as opportunities in Africa and beyond.
The tenth edition of PwC’s Africa Oil and Gas Review provides updated insights into the African oil and gas industry but expands the focus to include the unprecedented disruption caused by the COVID-19 global pandemic as well as the biggest global theme for this decade: the renewable energy transition.
Isaac Otolo, PwC’s Transactions Advisory Services Leader in the East Africa Region said over the past decade, they have witnessed a phenomenal global transition towards cleaner energy sources that are environmentally friendly. “In Kenya, this is evidenced by increased investments from both public and private sector players in renewable energy projects.”
The decade of the 2020s will be recorded in history as a pivotal period for the planet, the global economy and the energy and power landscape.
The report asserts an estimated decrease in oil production of 19 percent for the top five African producers for 2020 and a depressed market outlook in general.
Although as of last year, the industry trend lines were heading towards positive territory for the first time in several years, COVID-19 has reversed most of these gains as the global economy experienced the biggest oil demand slump in history, at nearly 40 times worse than the global financial crisis of 2007-2008.
The pandemic has accelerated the global energy transition with many countries using renewable energy projects to anchor economic stimulus packages and drive economic diversification.
Renewable energy’s contribution to Kenya’s total generation capacity has grown from 59 percent in 2012 to 69 percent in 2019. By 2030, renewable energy is expected to account for more than 75 percent of total installed capacity largely due to the Government’s ongoing commitment to diversify the country’s generation mix, which is already one of the most impressive in Africa.
Joseph Githaiga, PwC Kenya’s Regulatory Compliance and Advisory Leader, remarked that Kenya has proven to be an attractive destination for investment in renewable energy projects. “However, it’s very important for investors and other stakeholders to understand the regulatory landscape in order to set up and manage successful renewable energy operations in Kenya. These considerations include the legal and regulatory framework governing these projects, the role and function of the regulator, and clearances for operation of renewable energy entities in Kenya as well as certain tax considerations.”