Japan’s Cautious Approach to African Energy Markets Reveals Mixed Results
Japan’s quest for energy security has led the industrialized nation to explore African markets as potential suppliers, with mixed results emerging from its investment strategies. The country, which imports virtually all of its oil, natural gas, and coal that comprise 85% of its energy supply, has begun looking beyond its traditional Middle Eastern and Australian suppliers.
A significant milestone was achieved last June when the Nigerian National Petroleum Company (NNPC) shipped LNG to Japan for the first time, marking a new chapter in Nigeria-Japan energy relations. However, Japan’s most substantial African energy investment has faced considerable challenges.
The Mozambique LNG project, where Japanese companies hold a 20% stake through Mitsui and JOGMEC, has experienced significant setbacks. The Japan Bank for International Cooperation provided a $3 billion loan in 2020, with several major Japanese banks participating in the consortium. However, TotalEnergies was forced to declare force majeure in 2021 due to insurgency in Cabo Delgado province, pushing gas deliveries to 2030 at the earliest.
Despite these challenges, Japan continues to explore opportunities in African renewable energy. The Japan International Cooperation Agency (JICA) has provided loans for multiple green power projects, including a recent $150 million loan to the Development Bank of Southern Africa for renewable projects.
Looking ahead, Japan is increasingly interested in green hydrogen and ammonia partnerships with Africa. Nigerian-born Junaid Belo-Osagie, executive director at Mizuho Bank, believes this presents a significant opportunity for deeper Japan-Africa energy cooperation, particularly given Africa’s abundant renewable resources.
Source: african.business
