With nearly 90% of the country covered in rainforest, Gabon is an emblem of greenery and biodiversity within the Congo Basin. 

Owing to its vast amounts of forests and a population of only two million people, Gabon absorbs more carbon than it emits, making it a ‘carbon sink’. As of 2021, it is now being compensated to keep its landscape intact. 

In June, the UN-backed Norwegian fund Central African Forest Initiative (CAFI) paid Gabon $17m for protecting its forests. This is the first tranche in a deal signed with the UN-backed fund worth a total of $150m.

Gabon is making a concerted effort to move away from its hydrocarbons legacy. It is still among the top five oil producers in Africa, according to the World Bank, and is the smallest member country of the Organization of the Petroleum Exporting Countries (OPEC). 

Having passed a climate law that provides the foundation for selling carbon credits on the international market, among other things, Gabon is inching towards becoming a beneficiary of green or natural capital. Yet, while foreign investors eye Gabon for its solar and hydro build-out, the cost of building green infrastructure and the need to provide jobs for local Gabonese remains a challenge for the government. 

Paid to be green

Lee White, minister of forests, oceans, environment and climate change, tells fDi that working to determine the country’s net-carbon sequestration “transformed our thinking”. 

With an initial grant from CAFI, the Gabonese government moved to measure how carbon-negative it was. According to government estimates, the Gabonese rainforest sequesters roughly 140 million tonnes annually, meaning that it net absorbs more than 100 million tonnes per year.

“We hadn’t been thinking about the carbon market. We knew we were highly carbon negative, but we hadn’t firmed [the stats] up,” Mr White says, adding that this is in line with the country’s drive to become “more sophisticated about natural resource management”.

In September, the Gabonese government passed a new climate law, which lays the foundations for the country to sell carbon credits on the international market. 

Infrastructure and jobs

Mr White says that the government hopes to start trading in carbon soon, but he maintains that additional work must be done in green infrastructure, such as hydro and solar power, and low-carbon industries, such as furniture-making, to provide local jobs.

“The problem that Gabon has is that we have a very young population that we have to create jobs for,” he says. “Paying people hundreds of thousands [of dollars] to watch trees grow is not viable.” 

The answer, according to Mr White, is in sustainable logging.

With a law in place obliging logging firms to maintain a 30-year forest management and reforestation plan, Gabon is looking at how it can use its forests as both a carbon sink and a source of industry, combined with sustainable forestry. Cross-laminated timber buildings are one example of how forests can be used to create a sustainable construction alternative to concrete and steel.

A spokesperson for Fonds Gabonais d’Investissements Stratégiques (FGIS), the manager of the country’s sovereign wealth fund, says that the fund is looking to invest in cross-laminated timber alongside green energy infrastructure.

In July, FGIS and French global investor Meridiam reached financial close on the 350-megawatt (MW) Kinguele Aval hydropower plant on the M’Bei River, 90km east of the capital, Libreville.

The spokesperson says that for Gabon to invest in its future green infrastructure, its sources of funding will likely be a mixture of carbon credits, FGIS and foreign investment, but stresses that financing remains a challenge for the country.

Solar proposition

Elsewhere, foreign investors are eying solar opportunities. In July, independent power producer Total Eren signed a preliminary agreement with the Gabonese government to construct a 50MW solar park near Libreville, the capital. Turkish renewables developer Desiba Energy has also announced plans to build a 20MW solar power plant in Ngounié province in south-central Gabon.

“Renewable energies, particularly hydroelectricity and solar energy, are well placed to decrease the cost of energy and diversify Gabon’s energy landscape,” a company spokesperson said. “In this context, Total Eren is developing a solar photovoltaic power project in line with the government’s Emerging Gabon Strategic Plan.”

With a small grid and relatively small pipeline, Ben Attia, senior research analyst at Wood Mackenzie, says that “on a proportional basis, the decarbonisation of the power sector in Gabon is well underway”.

But, at present, wind and solar are yet to feature in the official statistics on the energy mix. According to the International Energy Agency, just over half of Gabon’s power generation comes from fossil fuels and just under half comes from hydropower. 

Much like the rest of the region, such renewables assets as Total Eren’s proposed solar park are “additive not substitutionary”, Mr Attia says, meaning that they won’t displace heavy fuel oil or carbon-intensive generation, but rather help to contribute to the electricity supply.

He adds that as the county diversifies its energy mix, there is a complementary interrelationship between water-based and sun-based energy, whereby the baseload power from hydro can be more easily increased and decreased than coal to help withstand solar intermittencies.

Image of Gabon

But it is not all green investments that are coming to Gabon. In September, Anglo–French oil and gas company Perenco announced plans to construct a liquefied petroleum gas production plant in Batanga, to the south of the country’s capital, Libreville. 

Gina Linder, sub-Saharan Africa analyst at AKE International, says that she has not seen an uptick in requests from clients in the renewables sector in Gabon, especially not compared with other countries in the region, but adds it is “not surprising” that it is leveraging its natural landscape.   

“If Gabon wants to attract investment, the government is going to need to address the regulatory side that has previously suffered from heavy interference,” Ms Linder continues.

While it is thought to be a relatively stable country in the region, Gabon has been dogged by concerns over government interference and corruption. In 2019, the president fired his vice president and minister of forestry following a timber-smuggling scandal.

Mr White agrees that more needs to be done if Gabon is to attract the investment it needs. “Being frank, we’re 169th on the World Bank’s Ease of Doing Business ranking. I don’t think the good environmental record is enough to compensate for [that],” he says. 

“If we can improve that number, like Rwanda did, then our green governance does come into play. In the next five years we might see more investments in Gabon because we are a carbon-negative country,” he says.

This article was first published in the December 2021/January 2022 edition of fDi Intelligence magazine.