Rich countries ‘trap’ poor nations into relying on fossil fuels
Rich countries ‘trap’ poor nations into relying on fossil fuels
Campaigners criticise ‘new form of colonialism’, where countries in the global south are forced to invest in fossil fuel projects to repay debts
I am a bit puzzled. Why are they forced to invest into fossil fuel projects when they are, as stated, not profitable enough?
Is the problem that they need energy projects and all of them are too expensive or is fossil fuel the problem because it already exists ? Also Fossil fuels are also widely used by the "Rich" countries.
Basicly these countries are in massive debt and have to repay their loans. The only realistic way of doing it is to extract fossil fuels.
Also having too much debt makes renewable investment less attractive. Generally speaking most green technologies are expensive in the begining and then make a good profit. Like you first have to pay for installig solar panels, but then they are nearly free to run. However fossil fuels are cheap to built initially, but then are expensive to operate due to fuel costs. If your country is in massive debt, it becomes much harder to make the inital investment into fossil fuels. Argentina for example should really be able to invest a lot into renewables as a relativly wealthy country. However bad financial policy has made that nearly impossible.
I don’t really understand it properly but it seems that the debt repayment is pegged to future fossil fuel revenue.
Mozambique was plunged into a debt crisis when oil and gas prices fell in 2014-16, Ribeiro said, but the solutions from international lenders to bail out the country have relied on loans being repaid through future gas revenues.
So I guess they can’t not repay the debt and they can only pay it back one way.
In the case of Mozambique Total has an unfinished project developing a gas field and building an LNG terminal. Due to ISIS attacking similar infrastructure in the country, they stopped construction. However Mozambique is already in a lot of debt and is just about able to serivce it. If Toal finishes the gas projects however, it becomes much more likely that Mozambique pays back its debt. Obviously the lenders lobby for fossil fuels in this case.
However the loans are not directly tied to the gas project and Mozambique could go renewable to repay its loans, but the LNG project is by far the most likely as construction has already started.
https://theexchange.africa/countries/mozambiques-debt-repayment-hinges-on-totals-lng-project/
Imagine if you only had these options. You want electricity now without relying on completely overhauling your infrastructure to meet new grids. Solar,wind and anything always has to get added into it like it’s a new part of the circuit. This influences poor nations heavily. We already have cheap oil and gas electrical infrastructure because we’ve been developing it for 60 years. Just look at the investment prices and you will see they don’t get to make choices.
Edit: forgot to mention this industry in particular has been for a lot longer than anyone else in modern society using incentives and lobbying to also influence income streams.
"The debt caused by fossil fuels are being structured to be paid back by fossil fuels"