New Report Reveals Fossil Fuel Investments Deepen Global Energy and Financial Crises

Summary: A recent report has unveiled that institutional investors, including over 7,500 pension funds, insurance companies, and asset managers, held approximately $5.1 trillion in fossil fuel assets as of mid-2024. This substantial investment has been linked to exacerbating global energy and financial crises, particularly in nations like Ghana. As highlighted by Accra Street Journal, Ghana’s reliance on fossil fuel projects, often backed by international financing, has led to increased debt burdens and energy insecurity, prompting calls for a shift towards more sustainable and equitable energy solutions

Detailed: A new report jointly released by ActionAid Ghana and the Centre for Research on Multinational Corporations (SOMO) has exposed the heavy toll that foreign-led fossil fuel investments and energy policies have placed on Ghana’s economy.

Titled “Gaslighting Ghana,” the report criticizes the role of multilateral institutions — particularly the World Bank — in promoting public-private partnerships (PPPs) and foreign private investments that have entrenched a fossil fuel-dependent model in the country’s energy sector. Rather than delivering energy security or economic stability, the report argues, these interventions have exacerbated Ghana’s financial vulnerabilities.

At the launch of the report, John Nkaw, Country Director of ActionAid Ghana, highlighted how these investments, often backed by World Bank guarantees, have left Ghana with massive costs for gas it could not use and electricity it could not afford.

“Rather than delivering energy security or economic stability, these interventions have deepened Ghana’s financial vulnerabilities — forcing the country to pay for gas it could not use for many years, electricity it could not afford, and contracts it had little room to renegotiate,” Mr. Nkaw said.

The report revealed that Ghana’s energy-related debt has soared, fueled by contracts involving multilateral institutions like the World Bank Group and the African Development Bank. Currently, the government spends between $1 billion and $1.5 billion annually to finance under-recoveries in the energy sector — a burden that directly affects public finances and service delivery to Ghanaians.

Nkaw further emphasized that the energy contracts have lacked transparency, affordability, and sustainability, often negotiated under conditions that heavily favour foreign investors and limit Ghana’s flexibility.

Luis Scungio, lead researcher at SOMO, detailed how, over the past two decades, PPPs promoted by international actors have pushed Ghana deeper into fossil fuel dependency while sidelining the potential for a renewable energy transition.

“The World Bank has played a pivotal role in creating an energy investment environment that prioritizes returns for foreign investors while shifting financial and operational risks onto the Ghanaian public sector,” Mr. Scungio said.

He pointed to three major projects — the West African Gas Pipeline (WAGP), the Jubilee and TEN oil fields, and the Sankofa Gas Project — as examples where World Bank-supported investments failed to deliver promised benefits.

For instance, despite the World Bank providing over $125 million in guarantees for the WAGP, Ghana reportedly received less than half of the promised gas for prolonged periods, leading the country to spend more than $25 million a month on costly fuel imports between 2014 and 2015.

Similarly, the Jubilee and TEN oil fields, once hailed as transformative, were hampered by infrastructure delays. Despite a $425 million World Bank investment, Ghana could not utilize its own gas until late 2014.

The Sankofa Gas Project, which attracted the World Bank’s largest investment in Africa at $1.2 billion, also became a financial strain due to high gas prices, infrastructure delays, and transport bottlenecks.

The report calls for a fundamental shift away from fossil fuel-heavy strategies toward a more equitable, renewable energy future. “Ghana is being asked to pay with its public finances, its climate future, and the welfare of its citizens for projects that serve others’ profit agendas,” Mr. Scungio remarked.

Charles Gyamfi Osei, Publicity Head for Climate Change and Energy Transition, also stressed that Ghana’s energy crisis is not merely technical or financial, but deeply structural.

He noted that since 2017, there have been no new significant discoveries in Ghana’s extractive sector, leading to stagnation, limited local content development, and minimal job creation.

“You can increase tariffs by 200%, even 1000%, but if inefficiencies remain, we’re going to keep running in circles. The burden keeps shifting to the consumer without addressing the root causes,” Mr. Osei warned.

The report comes at a time when public scrutiny of energy sector governance is high. While some government officials continue to present fossil fuel investments as necessary for Ghana’s development, the Gaslighting Ghana report adds to a growing body of criticism warning that foreign-backed fossil fuel projects — often signed under opaque conditions — are saddling the country with long-term debt and missed opportunities for cleaner, more sustainable energy development.

Last Updated on April 27, 2025 by samboad