Europe energy investments in North Africa ‘neocolonial’

European investments in energy and agriculture in Egypt and Morocco are extracting resources to the global north with little added value for the local economies, according to Greenpeace. 

Governments, financial institutions and energy and agricultural companies in Europe paint claim investments in green energy projects in North Africa are for the mutual benefit of all stakeholders.

But they actually perpetuate a cycle of resource depletion, economic dependence and environmental degradation in the host countries, while worsening climate impacts, the campaign organisation argues in a new report. 

Scrambled

Hanen Keskes, campaigns lead at Greenpeace Middle East and North Africa (MENA), said: “We urgently need a systemic shift in how global energy transitions are pursued. 

“Investments in renewable energy and green hydrogen in countries like Egypt and Morocco should prioritise local development, sustainability, and justice rather than perpetuating neocolonial dynamics.

“The transition to a green economy cannot replicate the injustices of the fossil fuel era – it must be transformative, inclusive, and centred on the needs of those who are most impacted,” she added.

This means cancelling unfair debt and surcharges, ending funding for fossil fuels and adopting progressive taxation, she explained. 

The report cites the example of the Russian invasion of Ukraine, and resulting energy crisis. European countries scrambled to secure gas from African and Middles Eastern countries to fuel their own consumerism when Russia cut 80 billion cubic metres of pipelined gas – exposing the exporter countries to environmental and social costs.

Inequalities

Europe invests significantly in Egypt, holding approximately €38.8bn of investments in 2020, some 39 per cent of the total foreign investment at the time. 

European investments in Egypt increasingly focus on green hydrogen production for export back to European countries, such as the signing last February of $40 billion of renewable energy projects and green hydrogen deals, according to Greenpeace.

The report also points to the injustice that although Egypt exports fossil fuels to Europe, it continues to suffer from fuel shortages for domestic consumption. Local communities are forced to endure energy blackouts and burn more polluting fossil fuels domestically. 

For example, Egypt is increasing its domestic use of dirty fuels such as mazut – a blend of heavy hydrocarbons containing toxins such as sulfides and heavy metals – so that they can free up more gas to export to Europe.

Similarly, European agribusiness investments in Morocco and Egypt focus on export-oriented cash crops like tomatoes and citrus fruits, which use substantial water resources and intensify water scarcity in an already dry region. Extractivist industries also deepen gender inequalities by relegating women to low-wage, insecure roles, and increasing unpaid care burdens. 

Neocolonial

The report recommends that current European energy investments and resulting projects are replaced by grassroots initiatives and community-centric renewable programmes.

Foreign companies investing in the global south should have to conduct comprehensive environmental and social impact assessments (ESIAs) generated by countries and communities most affected by financial institutions’ policies, and developed through participatory community process. 

Separately, a paper published in Nature concludes that wealthy nations are effectively outsourcing deforestation through their demand for products such as beef, palm oil, timber and soya beans. 

These commodities tend to be grown in countries with tropical forests, meaning that the rich countries were responsible for the destruction of 13 per cent of global loss of forest habitats outside their own borders. The US alone was responsible for three per cent of the world’s non-US forest habitat destruction.

Countries with the most significant impacts abroad included the US, Germany, France, Japan, China and the UK, the research found.

This Author

Catherine Early is a freelance environmental journalist and chief reporter for The Ecologist. Find her on Bluesky @catearly.bsky.social.