Chinese FDI in Africa's Energy Sector Grows as AEC Strengthens Ties with Beijing

Recognizing the growing influence of Chinese investments, the African Energy Chamber (AEC) is set to conduct a working visit to China.

Chinese foreign direct investment (FDI) in Africa has surged in recent years, with Beijing significantly expanding its global trade and credit lines through initiatives like the Belt and Road Initiative (BRI). In 2023 alone, up to $21.7 billion was invested in Africa, particularly in energy projects, where China is becoming a dominant player.

Key state-owned enterprises such as the China National Offshore Oil Corporation (CNOOC), China National Petroleum Corporation (CNPC), and China Petroleum & Chemical Corporation (Sinopec) have become the fourth-largest energy investors on the continent. As Africa's energy landscape continues to evolve, China's project portfolio is expected to grow substantially, creating new opportunities in upstream hydrocarbon development, regional infrastructure, and downstream processing.

Recognizing the growing influence of Chinese investments, the African Energy Chamber (AEC) is set to conduct a working visit to China. A delegation led by AEC Executive Chairman NJ Ayuk will engage in bilateral meetings with Chinese government officials and private sector leaders to discuss investment opportunities, bankable projects, and China’s expanding role in Africa’s energy sector. These discussions will cover opportunities across the entire energy value chain, from upstream exploration to downstream infrastructure and power and manufacturing industries.

China’s Expanding Energy Footprint in AfricaChinese companies have already established a strong presence in Africa’s mineral and renewable energy sectors, and they are now increasingly focused on developing the continent’s oil and gas resources. For instance, Wing Wah, a Chinese oil and gas company, is leading the Bango Kayo project in the Republic of Congo. This comprehensive initiative aims to optimize resource monetization and promote natural gas utilization by extending production beyond the initial block lifecycles and harnessing previously flared gas. The project is structured in three phases, incrementally enhancing gas processing capabilities to produce liquefied natural gas (LNG), butane, and propane, with a primary focus on meeting domestic demand and exporting surplus gas globally.

In Angola, China has invested nearly $14 billion over the past decade, mostly in the energy sector. Chinese companies are advancing refining projects and exploring new upstream oil and gas opportunities. Earlier this year, CNOOC executives visited Angola to explore potential investments in Block 24, a deepwater concession with promising potential. In addition, China National Chemical Engineering signed a memorandum of understanding (MoU) with Angola’s national oil company, Sonangol, for the development of the 200,000-barrel-per-day Lobito Refinery, which is set to become the country’s largest refinery.

In East Africa, CNOOC is partnering with TotalEnergies and the national oil companies of Uganda and Tanzania to develop the East African Crude Oil Pipeline (EACOP). This 1,443-kilometer pipeline will transport crude oil from Uganda’s Kingfisher and Tilenga oilfields to Tanzania’s Port of Tanga, with an estimated cost of $5 billion. Of this, $2 billion has already been raised, and the Ugandan and Tanzanian governments are seeking an additional $3 billion in debt financing, primarily from Chinese lenders such as the Export-Import Bank of China. CNOOC is also exploring deep-sea blocks in Tanzania and collaborating with South Sudan to boost output in the Paloch fields.

In West Africa, CNOOC launched wildcat drilling in Gabon’s Blocks BC-9 and BCD-10 in 2023 and renewed its production-sharing contract with the Nigerian National Petroleum Corporation and TotalEnergies for OML 130.

Strengthening Sino-African Energy TiesAs Africa’s pipeline of bankable oil and gas projects grows, Chinese investors are increasingly seen as crucial partners in the continent’s energy development. Leveraging strong multilateral ties established under programs such as the BRI, Chinese companies are emerging as preferred partners for upcoming oil and gas projects in Africa. AEC Executive Chairman NJ Ayuk emphasized the role of Chinese companies in catalyzing development as Africa aims to eradicate energy poverty by 2030.

The AEC’s visit to China comes ahead of the African Energy Week (AEW): Invest in African Energy conference, Africa’s largest energy event, set to take place on October 2-3 in Cape Town. With China’s growing investment portfolio in Africa, AEW: Invest in African Energy will provide a platform to connect Chinese investors with African opportunities, fostering new partnerships that will drive energy projects forward. The event will feature presentations, panel discussions, and investor forums focusing on bankable projects across the energy value chain, offering the information needed to advance investments in Africa’s energy future.