African nations have the “right and urgent duty” to develop their natural resources and economies to improve the lives of the continent’s inhabitants, according to Standard Bank Group Chief Executive Officer Sim Tshabalala.
“To argue that the poorest African countries should be prevented by externally imposed rules from using their non-renewable resources raises questions about where people who think like this stand on human rights and human development,” Tshabalala said in an opinion piece in South Africa’s Business Live. “To the contrary, the poorest countries should be able to borrow for, and invest in, almost all forms of energy generation and industrialization,” he said.
The comments from Africa’s biggest bank come amid protests by climate activists over the environmental damage that could be caused by the construction of the $4 billion East African Crude Oil Pipeline, or EACOP, that will transport 16,000 barrels of oil a day from Western Uganda to Tanzania’s Tanga port on the Indian Ocean coast.
Standard Chartered Bank Plc and Tokyo-based Sumitomo Mitsui Financial Group Inc. are among financiers that have declined to fund the project. Standard Bank Group is awaiting the conclusion of an environmental and social impact assessment study on the EACOP project, after which it will make a decision.
Read More: Decision Near on East African Pipeline, Standard Bank Says
“We have a right and an urgent duty to use all our resources to develop resilient agriculture, build effective storm-water drainage systems, implement decent town planning so that communities do not build homes on flood plains, and improve the lives of Africans generally,” Tshabalala said.
The South African lender’s sustainable finance portfolio is one of its fastest growing businesses, and is on track to achieve its target of funding more than 250 billion rand in sustainable finance by 2026, according to Tshabalala.
While the Johannesburg-based bank has come under pressure for its backing of fossil-fuel projects, it still aims to be a net zero business by 2050. It plans to gradually reduce financed emissions and increase funding for renewable energy, agriculture, reforestation and high-quality carbon offset programs, “which enable Africans to benefit from the fact that our forests and oceans absorb a lot of carbon,” he said.
“We think a just and feasible path to a net zero economy must include a substantial role for transition fuels like natural gas in middle and higher-income economies,” he said. “There is no one-size-fits-all answer.”
