In the midst of a changing global order, middle powers are growing in influence in Africa. Countries such as India, Turkey, and the Gulf monarchies jostle for opportunities to engage with African countries, seeing a chance to benefit from Africa’s largely untapped commercial and investment potential and its abundant energy resources.
One of the most prominent of these (in energy and beyond) is the United Arab Emirates (UAE) – the host of the UN climate conference (COP28) later this month. Over the past few years, the UAE has expanded its power projection and strategic investments in north and east Africa to reach every corner of the continent, ramping up both oil-related and non-oil investments in countries from Tanzania to Senegal, South Africa to Guinea. In doing so, it aims to foster Emirati private companies and create new revenue streams, supported by a web of strategic infrastructure and significant financial backing from its sovereign wealth funds.
Underpinning all this are Emirati leaders’ efforts to maintain a leading role in the global energy sector, yet also respond to the global energy transition by diversifying the UAE’s economy away from oil. This translates into a dual approach: on the one hand, the UAE resists pressure from the European Union and Western countries for a rapid phase-out of fossil fuels (a controversy that is likely to be a central theme at COP28), instead mitigating its continued oil and gas production with a commitment to carbon offset and removal mechanisms. On the other hand, it involves the UAE seeking leadership in green markets and climate diplomacy, backed by ambitious net-zero targets by 2050.
Despite the divergences over fossil fuels, the EU and its member states need to respond to the UAE’s increasing presence in African energy spaces to help counter the risks it could pose to European climate ambitions. They should aim to find common ground with the UAE on shared energy and climate-related objectives, in particular the rollout of renewable projects. By joining forces, Africans, Europeans, and Emiratis could accelerate the deployment of green technologies to respond to their own domestic needs, helping also to propel the world’s energy transition and simultaneously filling African countries’ massive energy and climate financing gaps.
The UAE meets Africa
The UAE poured $23.8 billion into Africa between 2016 and 2020, making it the second largest bilateral investor in the continent – alongside the United States and behind only China. And it shows no sign of slowing down: trade-wise, Emirati imports and exports with Africa reached almost $70 billion in 2021, again, a similar figure to African trade with the US.
Meanwhile, Emirati logistics and infrastructure companies, such as Dubai Port World and Abu Dhabi Ports, are making inroads across sub-Saharan Africa, by investing in free trade zones as well as more traditional maritime and transport infrastructure, as the monarchy works towards becoming a central connectivity node between Asia, Africa, and Europe.
When it comes to energy, most African countries share Abu Dhabi’s preference for a gradual reduction in the use of fossil fuels, broadly rejecting Western countries’ strict approach of a rapid phase-out. This reflects the need for many developing economies, including in Africa, to balance their climate ambitions with their development needs. In turn, state-owned Emirati enterprises, ADNOC and ENOC, which specialise in oil and gas, are expanding their presence in underdeveloped African markets. They have mainly focused on the construction of petroleum receiving and storage infrastructure to support the Emirati market expansion of refined products – the UAE’s major export item to some of its key African trade partners including Ethiopia, Kenya, Tanzania, and South Africa.
In renewables, the UAE’s investments in critical raw materials, such as bauxite, a source of aluminium crucial for the manufacture of green technologies and hydrogen fuel cells, underwrite and support Emirati leaders’ push to achieve their energy goals. One of the UAE’s most significant recent announcements was a $1.9 billion mining deal with the Democratic Republic of the Congo – which is also of clear interest to the EU, having recently signed a strategic partnership with Kinshasa to develop sustainable critical raw materials value chains.
What is more, a mix of public and private Emirati companies, such as Infinity Power, AMEA Power, and especially Masdar – the UAE’s leading green energy company – have signed a plethora of agreements across Africa to build solar, wind, hydrogen, and battery storage projects, signalling Emirati leaders’ ambitions to expand their market shares for the country’s companies and products. Notably, Masdar is a critical actor in the fast-growing development of ‘green hydrogen’ in Africa. Extending this to cooperation with Europeans, eyed in the UAE as possible markets for African hydrogen, is a potential area for ‘win-win-win’ engagement: a clear example already under way is Masdar and German firm Conjuncta’s $34 billion project in Mauritania.
Africa’s pressing development and energy access needs represent yet another opportunity for the UAE: to expand its market and advance its geopolitical ambitions, but also to showcase its abilities as a responsible global leader in climate diplomacy by mobilising green finance. In early 2023, Abu Dhabi launched the Etihad 7 programme, which commits to providing millions of Africans with clean energy by 2035. More recently, during Africa Climate Week, the COP 28 president-designate and CEO of ADNOC and Masdar, Sultan Ahmed al-Jaber, pledged $4.5 billion to support African economies accelerate the green transition – calling for developed countries to implement the $100-billion green finance annual fund for developing nations announced back in 2009. By addressing African priorities in this way, the UAE is likely to reap commercial and political dividends across the continent.
Risk and reward
Given Africa’s strategic significance to Europe’s energy security, decarbonisation, and industrial ambitions, the UAE’s expansion into Africa’s markets could present risks to long-term European objectives. The UAE’s soft stance on phasing down fossil fuels and big-ticket investments in the oil and gas sector are likely to weaken European decarbonisation efforts and move many African countries closer to Abu Dhabi. Moreover, the EU has identified the UAE’s lack of financial transparency as a liability, adding the monarchy to its list of high-risk third countries due to deficiencies in its anti-money laundering and counterterrorism financing regulations.
However, it would be short-sighted for European actors not also to acknowledge the opportunities that exist for coordination and cooperation with the UAE to fast-track the deployment of solar, wind, hydrogen, and other green initiatives in Africa. This cooperation should build on their respective comparative advantages: Europe’s green tech expertise and regulatory heft, and the UAE’s financial and connectivity capacity.
The EU and member states should leverage the framework agreed by the EU and Gulf Cooperation Council states, the EU-GCC Strategic Partnership. The framework envisages the European Green Deal and REPowerEU initiatives underpinning clean energy cooperation between the EU and the UAE, but it also conceives opportunities to extend that cooperation to third countries to work towards goals in the energy and climate sphere, including improving access to clean and affordable energy. This kind of cooperation with the UAE and African countries could contribute to nurturing valuable (and inevitable) interdependencies and a more cooperative international environment in unlocking climate and green energy finance.
To set the stage for such trilateral energy cooperation, European policymakers should aim to engage Emirati and African representatives at COP28, along with international and financial institutions. They should identify, together with the private sector, priority clean energy projects to jointly advance across Africa. For example, financial institutions such as the European Bank for Reconstruction and Development (ERBD), the European Investment Bank, and Emirati and African sovereign wealth funds could join forces to provide equity, concessional capital, and financial guarantees to the private sector. The EU could provide support to improve energy market regulatory environments. And Africa 50 – the African Development Bank’s arm to facilitate the development and financing of energy, transport, and digital infrastructure – could possibly serve as a connecting platform, building on its existing partnership with Masdar and ongoing cooperation with European companies and development institutions (including the EBRD).
European actors need to focus on finding solutions to implement the energy transition that are more acceptable in global south contexts (than, for example, a blanket application of the EU’s controversial carbon border adjustment mechanism). They also need to be able to interact with rising middle powers like the UAE (which are increasingly shaping global energy dynamics). By cooperating with the UAE on energy in Africa, the EU and member states would therefore better serve their own energy, economic, and geopolitical interests. This would include regaining some political leverage in the global south, by pragmatically reconciling diverse visions of the energy transition into collaborations that work towards shared goals.
The European Council on Foreign Relations does not take collective positions. ECFR publications only represent the views of their individual authors.