NATURAL GAS IN AFRICA AMID A LOW-CARBON ENERGY TRANSITION

The report finds that LNG developments in Mozambique and Tanzania face significant transition risks, with asset values potentially dropping by 61% and 69% respectively in a 'Well Below Two Degrees Centigrade' (WB2C) scenario. In a 'Net Zero by 2050' (NZE) scenario, most projects would become uneconomic or 'value destructive' for investors. The authors argue that pursuing domestic gas-led industrialisation could further erode the viability of export projects and may require substantial government subsidies, potentially costing Tanzania approximately $5 billion over 30 years. Consequently, governments face material downside risks to public finances, as they intend to use gas revenues for public expenditure.

• LNG developments in East Africa are highly exposed to transition risk. In a 'Well Below Two Degrees Centigrade' (WB2C) scenario, Mozambique's LNG resources would lose 61% ($66.4 billion) of their value, while Tanzania's would lose 69% ($20.1 billion) compared to a 'Business as Usual' (BAU) scenario. In a 'Net Zero by 2050' (NZE) scenario, most assets would be uneconomic, and investors would fail to meet targeted returns.
• Governments in Mozambique and Tanzania face substantial revenue losses under climate transition scenarios. In a WB2C scenario, the two governments would collectively earn $63 billion less than in a BAU scenario, with Mozambique losing $49 billion and Tanzania losing $14 billion on a net present value basis. This risk threatens the funding of planned public expenditure and development plans.

APA

ANWAR, M., NEARY, P., & HUXHAM, M. (2022). NATURAL GAS IN AFRICA AMID A LOW-CARBON ENERGY TRANSITION. African Climate Foundation. https://africanclimatefoundation.org/wp-content/uploads/2022/10/Natural-gas-in-Africa-amidst-a-global-low-carbon-energy-transition-A-case-study-of-Mozambique-and-Tanzania-Final-Web.pdf

Chicago

ANWAR, MUHAMMED, PATRICK NEARY, and MATTHEW HUXHAM. NATURAL GAS IN AFRICA AMID A LOW-CARBON ENERGY TRANSITION. African Climate Foundation, 2022. https://africanclimatefoundation.org/wp-content/uploads/2022/10/Natural-gas-in-Africa-amidst-a-global-low-carbon-energy-transition-A-case-study-of-Mozambique-and-Tanzania-Final-Web.pdf.

Wikipedia

{{cite report |last1=ANWAR |first1=MUHAMMED |last2=NEARY |first2=PATRICK |last3=HUXHAM |first3=MATTHEW |title=NATURAL GAS IN AFRICA AMID A LOW-CARBON ENERGY TRANSITION |publisher=African Climate Foundation |date=November 2022 |url=https://africanclimatefoundation.org/wp-content/uploads/2022/10/Natural-gas-in-Africa-amidst-a-global-low-carbon-energy-transition-A-case-study-of-Mozambique-and-Tanzania-Final-Web.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{anwar2022natural, author = {ANWAR, MUHAMMED and NEARY, PATRICK and HUXHAM, MATTHEW}, title = {{NATURAL GAS IN AFRICA AMID A LOW-CARBON ENERGY TRANSITION}}, institution = {African Climate Foundation}, year = {2022}, month = nov, url = {https://africanclimatefoundation.org/wp-content/uploads/2022/10/Natural-gas-in-Africa-amidst-a-global-low-carbon-energy-transition-A-case-study-of-Mozambique-and-Tanzania-Final-Web.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }