By Hon. Prof. Kariuki Muigua, OGW, PhD, C.Arb, FCIArb is a Professor of Environmental Law and Dispute Resolution at the University of Nairobi, Member of Permanent Court of Arbitration, Leading Environmental Law Scholar, Respected Sustainable Development Policy Advisor, Top Natural Resources Lawyer, Highly-Regarded Dispute Resolution Expert and Awardee of the Order of Grand Warrior (OGW) of Kenya by H.E. the President of Republic of Kenya. He is The African ADR Practitioner of the Year 2022, The African Arbitrator of the Year 2022, ADR Practitioner of the Year in Kenya 2021, CIArb (Kenya) Lifetime Achievement Award 2021 and ADR Publisher of the Year 2021 and Author of the Kenya’s First ESG Book: Embracing Environmental Social and Governance (ESG) tenets for Sustainable Development” (Glenwood, Nairobi, July 2023) and Kenya’s First Two Climate Change Law Book: Combating Climate Change for Sustainability (Glenwood, Nairobi, October 2023), Achieving Climate Justice for Development (Glenwood, Nairobi, October 2023) and Promoting Rule of Law for Sustainable Development (Glenwood, Nairobi, January 2024)*
Africa is a continent that is endowed with immense sources of energy including renewables such as wind, solar, hydro, bioenergy, ocean tidal waves, geothermal among other renewables. It has been pointed out that the Continent is home to approximately eight per cent of the world’s natural gas and 12 per cent of the world’s oil reserves. According to the International Energy Agency, oil and gas continue to dominate energy use in North Africa and coal dominates in South Africa, due to the local availability of low cost resources, while renewables are the dominant fuel category in Sub‐Saharan Africa.
Africa Union’s Agenda 2063 identifies energy as the backbone of Africa’s economic transformation. Agenda 2063 seeks to enhance utilization of the Continent’s energy sources, especially renewable energy in fostering economic growth and eradicating energy poverty. It further seeks to promote environmentally sustainable and climate resilient economies and communities in Africa wherein renewable energy (including wind, solar, hydro, bioenergy, ocean tidal waves, geothermal and other renewables) will claim more than half of the energy consumption for households, businesses and organizations.
The International Energy Agency asserts that electricity will underpin Africa’s economic future, with solar leading the way. It further posits that electricity is the backbone of Africa’s new energy systems, powered increasingly by renewables. The need for energy transition has accelerated investments in energy in Africa towards enhancing access to energy. Sustainable Development Goal (SGG) 7 under the United Nations 2030 Agenda for Sustainable Development seeks to ensure universal access to affordable, reliable, sustainable and modern energy for all.
Access to energy in Africa is crucial not only for the attainment of health and education outcomes, but also for reducing the cost of doing business and for unlocking economic potential and creating jobs. However, access to energy in Africa still remains a major problem where majority of the population lack access to clean and affordable energy and depend on traditional fuels. It has been estimated that nearly 600 million people or an equivalent of 43 per cent of the Continent’s population lack access to electricity. It has also been pointed out that Africa does poorly compared to other regions regarding access to clean cooking since a majority of its population relies on traditional biomass for preparing food.
These problems have necessitated investments in energy in order to foster access to energy in Africa. Further, the International Energy Agency points out that problems in the energy sector including global energy crisis brought about by Russia’s invasion of Ukraine, and climate change have underscored the urgency as well as the benefits of an accelerated scale up of cheaper and cleaner sources of energy in Africa. It has been asserted that the immense potential for growth in the energy sector in Africa, and the need to do so in line with the large and growing population’s energy demand, makes it an attractive destination for global investment flow.
Further, it has been correctly observed that the renewable energy resources with which Africa is endowed, in tandem with the recent initiatives to accelerate development of its energy requirements, has resulted in an increase in energy projects and, with that, the potential for a growing number of disputes coming from the energy sector in Africa. Despite the vast investment opportunities available in the energy sector in Africa, entrants into energy markets in Africa often face risks that pose huge threats to the economic viability of investments. If not properly addressed and mitigated, such risks may result in complex and protracted legal disputes.
It is estimated that Africa will see the largest growth in energy-related disputes, driven by an increase in exploration activities in many countries across the continent. In addition, it has been observed that given the heavy presence of foreign investors in the African energy sector, energy disputes are likely to arise under both contractual instruments (such as concession agreements) and investment treaties. Additionally, energy disputes in Africa may arise in respect of compliance with requirements under concessions and local laws such as the decommissioning of oil fields in a safe, environmentally friendly manner.
The potential for Africa to be a hive of activity for energy-related disputes is ultimately a consequence of its leading position in global energy production, both in the oil & gas and renewable energy sectors. There is need for effective management of energy disputes in Africa. Such disputes can adversely impact the viability and success of energy projects in Africa. Consequently, it is imperative to effectively and efficiently manage energy disputes in Africa in order to foster the success of energy projects and ensure that the energy transition maintains its positive course.
*This is an extract from the Book: Promoting Rule of Law for Sustainable Development (Glenwood, Nairobi, January 2024) by Hon. Prof. Kariuki Muigua, OGW, PhD, Professor of Environmental Law and Dispute Resolution, Senior Advocate of Kenya, Chartered Arbitrator, Kenya’s ADR Practitioner of the Year 2021 (Nairobi Legal Awards), ADR Lifetime Achievement Award 2021 (CIArb Kenya), African Arbitrator of the Year 2022, Africa ADR Practitioner of the Year 2022, Member of National Environment Tribunal (NET) Emeritus (2017 to 2022) and Member of Permanent Court of Arbitration nominated by Republic of Kenya. Prof. Kariuki Muigua is a foremost Environmental Law and Natural Resources Lawyer and Scholar, Sustainable Development Advocate and Conflict Management Expert in Kenya. Prof. Kariuki Muigua teaches Environmental Law and Dispute resolution at the University of Nairobi School of Law, The Center for Advanced Studies in Environmental Law and Policy (CASELAP) and Wangari Maathai Institute for Peace and Environmental Studies. He has published numerous books and articles on Environmental Law, Environmental Justice Conflict Management, Alternative Dispute Resolution and Sustainable Development. Prof. Muigua is also a Chartered Arbitrator, an Accredited Mediator, the Managing Partner of Kariuki Muigua & Co. Advocates and Africa Trustee Emeritus of the Chartered Institute of Arbitrators 2019-2022. Prof. Muigua is a 2023 recipient of President of the Republic of Kenya Order of Grand Warrior (OGW) Award for his service to the Nation as a Distinguished Expert, Academic and Scholar in Dispute Resolution and recognized among the top 5 leading lawyers and dispute resolution experts in Band 1 in Kenya by the Chambers Global Guide 2022 and was listed in the Inaugural THE LAWYER AFRICA Litigation Hall of Fame 2023 as one of the Top 50 Most Distinguished Litigation Lawyers in Kenya and the Top Arbitrator in Kenya in 2023.
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