As Africa grapples with deep-rooted energy poverty and mounting climate pressures, financial services provider Standard Bank is positioning itself as a key enabler of a pragmatic just energy transition. For Africa’s largest lender, this does not mean choosing between renewables and fossil fuels, but rather ensuring that both are harnessed responsibly to fuel inclusive growth.

Standard Bank views upstream oil and gas not as a legacy burden, but as a growth lever for emerging African economies. It cites countries, such as Mozambique, Angola, Nigeria and Ghana, which continue to rely on fossil fuel exports to fund national budgets, build infrastructure and stimulate job creation.

“We haven’t seen any country achieve massive growth without energy, of which oil and gas remain a critical part of Africa’s energy mix,” says Standard Bank global energy and infrastructure head Dele Kuti.

The bank has taken a leading role in Mozambique’s multibillion-dollar liquefied natural gas (LNG) megaproject, describing it as transformative for the country. “The first four LNG projects will need more than $80-billion in investment and lift Mozambique from a low-income country to middle-income country,” Kuti adds.

From mature producers, in Nigeria, to frontier markets, such as Namibia and Senegal, Kuti highlights that Standard Bank is “doubling down on upstream partnerships”, with a focus on responsible development and emissions mitigation.

He says the bank ensures that its partners, including new entrants, as well as independent and integrated energy companies, have energy transition principles in place and are committed to lowering operational carbon.

Financing Strategy

Capital for frontier upstream projects in Africa has become more difficult to access, with Organisation for Economic Cooperation and Development (OECD) banks having limited appetite for such endeavours, says Kuti.

Standard Bank, however, is filling that gap – not only as a lender but also as a long-term strategic partner.

Although liquidity is a major barrier, Kuti highlights that Standard Bank works with regional African commercial bank and international development banks, including Afreximbank and the Africa Finance Corporation, to mitigate the challenge.

Standard Bank also engages with global investors through its offices in New York, in the US; Dubai, in the United Arab Emirates; Beijing, in China; and London, in the UK to match capital with credible local operators across the continent. These efforts are coupled with derisking instruments such as sovereign guarantees, reserves-based lending and longer-term debt structures.

“For mature-producing fields, we also structure bond instruments or debt capital market facilities, and for frontier countries, we help governments secure fiscal stability commitments to unlock initial capital,” he explains.

The bank also provides technical assistance, including training national oil companies on project financing structures, and environmental, social and governance compliance.

In Namibia, the bank has taken a proactive position by arguing that the country could proactively develop its oil and gas resources as it prepares for its first major offshore developments.

Balancing Oil and Just Transition Interests

Despite a robust commitment to upstream oil and gas, Standard Bank maintains alignment with global climate goals, guided under the auspices of balance and context.

Kuti highlights that for every dollar the bank invests in upstream, it is also investing three to five times more in renewables, adding that the bank cannot afford to abandon countries whose economies are heavily reliant on oil and gas, as this would lock Africa into a low-growth path.

Standard Bank’s climate policy guides all upstream engagements to ensure that environmental safeguards and transition planning form a part of every deal. Further, Kuti emphasises that upstream support is contingent on partners’ aligning with global best practices.

In contrast to the ‘limited choice’ narratives dominating global energy discussions, he affirms that upstream oil and gas must remain part of the solution – not as a contradiction to climate goals, but as a bridge to economic sovereignty and energy resilience.

“Our purpose is to drive Africa’s growth, and without energy, there is no growth. For Africa, that growth still flows, in part, through oil and gas pipelines, and for Standard Bank, upstream financing remains not just viable, but vital,” Kuti concludes.