SPECIAL REPORTS AND PROJECTS

Will more sovereign wealth funds mean less food sovereignty?

Published

2 years ago

April 13, 2023

In November 2022, word got out that Ferdinand Marcos Jr, the freshly minted president of the Philippines, wanted to set up a sovereign wealth fund. People scratched their heads. What wealth? The Philippines is mired in debt! It was quickly understood that this was a kind of vanity project, meant to improve the image of a man who came to power because of his family name.

Marcos’ father ruled the Philippines from the mid-1960s to the mid-1980s with an iron fist. Known more for kleptocracy and the brutality of martial law, the Marcos name needed a face-lift, local media put it. Marcos boasted that a sovereign wealth fund would boost investor confidence and attract resources to fund big projects in infrastructure or agriculture. He even dubbed it “Maharlika Fund”, a nod to the mythical warrior figure that his father claimed to personify during World War II.

Vanity aside, Marcos’ proposal raised fears of graft and corruption. After all, not long ago, Malaysia’s sovereign wealth fund (known as 1MDB) was exposed as a multi-billion dollar money laundering scheme for the personal benefit of Prime Minister Najib Razak, who now sits in jail. Yet, Marcos managed to get his proposal onto his country’s legislative agenda in a matter of weeks, and brought it to international investors in Davos and Tokyo for their approval as well.

What are these “sovereign wealth funds”? How are they being used? What link, if any, do they have with people’s struggles around food sovereignty, land grabbing and today’s deepening climate crisis?

Rise of sovereign wealth funds

The first sovereign wealth funds were set up in the 19th century, and grew slowly throughout the 20th. The idea, at first, was rather simple. If a state has excess resources – perhaps mineral wealth or a sudden boom in foreign exchange from exports – these should be tucked away for future use for the benefit of society.

Norway is the classic example. In the late 1960s, oil was discovered off its coast. Overnight, the country become unfathomably rich. After much debate, the government decided to set up a wealth fund – basically a piggy-bank belonging to all Norwegians. It is fed by a tax levied on the oil and gas extracted from Norway’s seabed, plus the revenues of Norway’s state-owned oil and gas companies.

This wealth is meant to be used “for present and future generations”. To ensure this, no one is allowed to touch the underlying pot of money itself, but the interest it earns each year goes into the national budget to pay for things like public health care, generous parental leaves, retirement pensions and public infrastructure. In concrete terms, Norway’s wealth fund contains $1.1 trillion. That money is invested in 9,000 publicly-listed companies across 70 countries around the world. The investments generate a return of about 3% a year, which is what goes into the national budget to provide everyone in Norway with those public services. It has become a source of national pride and unity across the political spectrum.

Many sovereign wealth funds were set up with a similar logic. The “wealth” may come from diamonds (Botswana) or copper (Chile), foreign currency reserves (China) or export earnings (Saudi Arabia). Even the state of Texas in the United States wrote into its constitution back in the 1850s that “available public lands” should be used to finance public schools. To do this, lands were either sold outright or were leased with the proceeds feeding a Permanent School Fund (a sovereign wealth fund) run by a trio of local civil servants. In all of these cases, the funds are created with resources that arguably belong to everyone and serve a public interest objective such as guaranteeing social rights (e.g. retirement for all in Norway) or covering national budget deficits in times of crisis (e.g. as happened with Covid-19 in Peru) or providing children with access to education (Texas).

Recently, however, governments have started diverging from this logic. Increasingly, sovereign wealth funds are being set up with no resources or wealth or sovereign character to speak of. Indonesia’s sovereign wealth fund, which was set up in 2021, is more like a “development” fund. It aims to secure foreign investment from companies, banks and funds in order to build local infrastructure and energy projects. Not much different from what the government already does. The Philippines’ proposal is more like a “public-private partnership” fund, as foreign investors will be asked to do joint ventures with the state or with local businesses. At one point, the government was proposing that the fund should be handed over to the private sector and listed on the stock market! Quite a number of small countries with no surpluses to speak of have set up sovereign wealth funds by offering citizenship to wealthy individuals (leading to corruption scandals as well).

Over the past two decades, the number of sovereign wealth funds has surged (see graph) and there are now more than 100 sovereign wealth funds around the world.[1] Collectively, they hold $10 trillion – which makes them the third largest economy, after the US and China, if they were a country. That figure is expected to reach $17 trillion by 2030. While most sovereign funds are national in scope, some are sub-national. The state of Queensland, in Australia, has one. Palestine has one. Even the city of Milan has one.

Some of these funds invest only abroad, some invest only at home and some do both. Key sectors they put their money in, to capture earnings, include energy, technology, health, finance and real estate. All told, sovereign funds are so massive that most people have probably had some connection to them, as they own bits of Alibaba, Flipkart, Uber, Slack, Grab, major airports, the world’s top football teams and social media like Twitter. Anyone paying for these is actually helping sovereign wealth funds take money home.

And while it seems to be a trend among political elites these days to think that setting up such structures can bring funds into the global South, 80% of sovereign wealth fund assets is currently parked in Europe and North America. In fact, one-third is in the US alone.

Agriculture: a critical concern

In dollar terms, food and agriculture represent just 2-3% of all sovereign wealth fund investments. While that sounds small, it is a politically sensitive and strategic sector for many governments. Contributing to national food security has been a historic role for sovereign funds, and it is a vital one for those of Singapore and the Gulf states.

At least 42 sovereign funds are currently invested in food and agriculture (see table). Some are major players, but many are less visible (see box). Their investments may be in largescale farmland acquisitions and production, such as orange groves in Brazil, cattle ranches in Australia or vertical pig farms in China. Some take the form of ownership stakes in global food commodity traders that ship grains, oilseeds and coffee across our oceans, like Bunge, COFCO or Louis Dreyfus. Yet others are positions in food retail systems like supermarket chains or delivery services, and the digital technologies that these operations increasingly rely on.

A handful of actors form the centre of gravity of global agricultural investing by sovereign funds. They are Temasek and GIC in Singapore; PIF in Saudi Arabia; Mubadala and ADQ in UAE; QIA in Qatar; RDIF in Russia; and COFIDES in Spain (see map). The Singaporeans and the Gulf states invest with their own food needs as a priority. RDIF brings big investors into Russia to help finance its export-oriented agribusiness sector. And COFIDES funds food projects around the world with one catch: a Spanish company must be directly involved in and profit from it, such as Borges with almond production in Europe or Pescanova with fish farming in Latin America. (Actually, there is a second catch: all of COFIDES’ overseas food and agriculture investments are loans.[2])

Quite a number of sovereign wealth fund ventures in agriculture are linked to concerns about land and water grabbing, whether directly and indirectly. In December 2022, Abu Dhabi’s government-owned ADQ, which has $110 billion in assets, got hold of 167,00 hectares of farmland in northeast Sudan.[3] It plans to grow sesame, wheat, cotton and alfalfa there, while it builds a massive new port nearby to ship the goods out. ADQ already owns:

45% of Louis Dreyfus Company, with its massive land holdings in Latin America, growing sugarcane, citrus, rice and coffee;
a majority stake in Unifrutti, with 15,000 ha of fruit farms in Chile, Ecuador, Argentina, Philippines, Spain, Italy and South Africa; and
Al Dahra, a large agribusiness conglomerate controlling and cultivating 118,315 ha of farmland in Romania, Spain, Serbia, Morocco, Egypt, Namibia and the US.

Therefore, the concerns are quite serious. Al Dahra stands accused of draining aquifers in Arizona, just so that it can produce hay to transport back to UAE to feed local dairy herds.[4]

Saudi Arabia’s Public Investment Fund (PIF), one of the world’s top ten sovereign wealth funds in terms of assets, has $13.7 billion invested in agriculture. It owns several massive agribusiness conglomerates focused on livestock, dairy and fisheries. In 2021, it took 100% control of the Saudi Agricultural and Livestock Company (SALIC) which is engaged in meat and cereal production in Canada, Ukraine, India, Brazil, Australia and the UK.[5] The scale is enormous. In India, PIF produces its staple, basmati rice.

From Brazil, it gets its beef. In Australia, it operates 200,000 ha for sheep grazing and also buys lamb and mutton directly from producers. In Ukraine, it has 195,000 ha growing wheat, barley, maize and rice. PIF also owns 35% of Olam Agri, a major palm oil producer, and is building the largest vertical farm in the entire Middle East and North Africa region.[6] It is very strange, then, to learn that PIF’s new green financing instrument will explicitly exclude funding for any projects or expenditures associated with industrial agriculture or livestock![7] It shows the doublespeak of investors that expand intensive industrial food systems while needing to flash climate credentials.

Another very big player is Qatar. Its sovereign wealth fund has massive land holdings in Australia, through a stake in the 4.4 million ha Paraway Pastoral Company dedicated to livestock production. The fund allows Qatar to source its organic food supplies through Canada’s Sunrise Foods, which operates in Turkey, Netherlands, Russia, Ukraine and US. It owns poultry and seafood companies in Oman, and is now developing agriculture supply chains in East Africa. The Qatari wealth fund is connected to a Russian oil company which owns 50% of Agrokultura, which operates 200,000 ha of farmland in Russia. It also owns 14% of AdecoAgro with its 472,862 ha hectares under production in Argentina, Brazil and Uruguay. It is now going into Kazakhstan for the same purposes – and in direct competition with the UAE.[8]

It is important to note that many of these arrangements between sovereign wealth funds and global agribusiness involve political guarantees. Qatar is one of the biggest investors in Glencore, with whom it has a deal to ensure its access to grains and shipping services in case of need. The same is true with Qatar and Turkey’s Tiryaki Agro Group. The fund’s agricultural arm, Hassad Food, has its own agreement with Sunrise Foods which ensures that in the event of any shortage in the Qatari market, the country’s need for grain, oilseeds and wheat will be met on a priority basis.[9] Similarly, when Abu Dhabi’s ADQ bought 45% of Louis Dreyfus – the world’s third largest commodity trader – it signed a side deal giving it priority access to food shipments in times of global crisis, as the world experienced recently during both Covid-19 and the Russian invasion of Ukraine.[10]

It is fair to say that the political strategy of leveraging sovereign wealth to get access to global food supplies works. What is never mentioned is at what cost. For many of these big investment projects expand and entrench largescale corporate agribusiness, with its contingent slew of land conflicts, water pollution, indigenous rights abuses, labour violations and spiralling climate emissions. And when it comes to the Gulf states or Singapore, these are very small populations draining the resources of much bigger ones. With sovereign funds, scale is baked in. Even when they do try to reckon with social and environmental contingencies, as in the case of PIF, their attempts at making investments green or socially responsible are shallow at best. Only Norway’s stands out as making strong commitments to scrutinise and withdraw from agribusiness companies associated with social and ecological crimes, as it has done with meat packers and soy producers in Brazil (Minerva, Marfrig, SLC Agricola and JBS) as well as rubber giant Halcyon Agri.[11]

So, to answer the question: what do these funds have to do with food sovereignty? The answer is: it’s twisted. They do provide food security for a few countries. And political elites increasingly like to use the term food sovereignty to characterise these missions, as it serves their nationalist, territorial and militarist frameworks.[12] But sovereign wealth funds crush real visions of food sovereignty as they take resources away from local communities and push a capitalist, industrialist food system – be it green or not.

Putting the public interest first

Sovereign wealth funds can be a good idea if they really are sovereign (run by the people), if the resources they harness are democratically sourced and organised, and if they have a genuine public welfare mandate. We actually need more commitment to public approaches to reverse the growing inequality and privatisation that is undermining people’s rights to healthcare, housing, transportation, food, education and retirement in most countries around the world.

But there is a danger. There are increasing calls to set up sovereign wealth funds to solve government problems – from building a new capital city in Indonesia to plugging an alleged deficit in France’s pension system. But these newer funds are just tools to channel money into government coffers or private enterprises. They are not built on any collective resource or aimed at protecting a public wealth for the benefit of future generations. They seem to have little to do with traditional sovereign wealth funds, apart from the name. For that reason, they should be scrutinised and if they don’t genuinely serve the public interest they should be stopped. Similarly, those that contribute to land or water grabbing should be challenged and stopped, too.

Agriculture may not be the number one sector that these funds gravitate towards to generate wealth. But politically, geopolitically and strategically, food security is a core concern of theirs and will continue to be, requiring our critical scrutiny as well.

We need good public services that provide for public well-being. Sovereign wealth funds – despite their name – need to be put to a more scrupulous test to see if they have a role to play in that agenda.

Less visible players: Big players aside, many sovereign wealth funds participate in financing the direction of food and agriculture.[13]

• Angola’s sovereign wealth fund is investing in food and agriculture in Africa through a private equity fund that is targetting the production of maize, beans, soybeans, rice and cattle.

• Australia’s sovereign wealth fund has a Future Drought Fund since 2019. Currently holding A$4.5 billion, its sole aim is to “provide secure, continuous funding to support initiatives that enhance the drought resilience of Australian farms and communities.” Its investments must deliver returns of 2-3% above the consumer price index.

• Bolivia has a sovereign wealth fund that was set up in 2012 with state surplus funds and a loan from the central bank. It invests domestically in both public and private enterprises involved in honey production, fruit processing, aquaculture, dairy, quinoa and stevia.

• Brunei’s new sovereign wealth fund is considering investing in agriculture, in partnership with the Malaysian Investment Development Authority.

• Not much is known about how China’s sovereign wealth funds invest. The China Investment Corporation has $1.3 trillion, making it the largest in the world. It invests in agriculture overseas and reported a remarkable return of 14.27% on its overseas holdings in 2021. Equally remarkable, alternative investments, which include private equity and farmland, are said to account for 47% of its overseas portfolio. China’s National Social Security Fund is also a sovereign wealth fund and is invested domestically in agriculture through its private equity portfolio.

• France’s sovereign fund is known to be a big investor in agriculture and food, both domestically and abroad. One very controversial foreign project it is connected to is led by Arise IIP, a subsidiary of Olam, in Chad.[14]

• Gabon’s sovereign wealth fund, built from oil revenues, runs a private equity fund that invests in the food and agriculture sector. It also invests directly in agriculture and farmland projects at home.

• The National Development Fund of Iran has some $24 billion, most of it from oil and gas revenues and all of it invested domestically. According to some sources, 1% is invested in water and agriculture, including farmland ownership, a sector the fund wants to invest more in.

• Ithmar Capital, a state investment company, serves as Morocco’s sovereign wealth fund. Details are lacking but their strategy is to co-invest in Moroccan agribusiness operations with foreigners such as Spain’s COFIDES or Gulf state investors.

• Nigeria, like Abu Dabhi and Spain, has its sovereign wealth fund investing in fertiliser production. This is a very strategic concern.

• Palestine’s sovereign wealth fund is a public company that does local impact investing. Its initial funds came from the Palestinian Authority. It is invested in a 50 hectares seedless grape farm, looking into investing in animal feed production and helping set up a National Agriculture Investment Company.

• Türkiye Wealth Fund has 2% of its investments in food and agriculture, as of 2019.

• In the US, the states of Texas, New Mexico and Alaska have sovereign wealth funds that are heavily invested in farmland, whether directly or through private equity funds. The agribusiness operations they fund are in some cases domestic and in others overseas (usually in the Southern Cone of Latin America or Australia).

• Vietnam’s State Capital Investment Corporation is invested in agriculture/farmland through a joint venture with the State General Reserve Fund of Oman, showing how co-investing is a common strategy of sovereign funds.

Sovereign wealth funds invested in farmland/food/agriculture (2023)
Country	Fund	Est.	AUM (US$bn)
China	CIC	2007	1351
Norway	NBIM	1997	1145
UAE – Abu Dhabi	ADIA	1967	993
Kuwait	KIA	1953	769
Saudi Arabia	PIF	1971	620
China	NSSF	2000	474
Qatar	QIA	2005	450
UAE – Dubai	ICD	2006	300
Singapore	Temasek	1974	298
UAE – Abu Dhabi	Mubadala	2002	284
UAE – Abu Dhabi	ADQ	2018	157
Australia	Future Fund	2006	157
Iran	NDFI	2011	139
UAE	EIA	2007	91
USA – AK	Alaska PFC	1976	73
Australia – QLD	QIC	1991	67
USA – TX	UTIMCO	1876	64
USA – TX	Texas PSF	1854	56
Brunei	BIA	1983	55
France	Bpifrance	2008	50
UAE – Dubai	Dubai World	2005	42
Oman	OIA	2020	42
USA – NM	New Mexico SIC	1958	37
Malaysia	Khazanah	1993	31
Russia	RDIF	2011	28
Turkey	TVF	2017	22
Bahrain	Mumtalakat	2006	19
Ireland	ISIF	2014	16
Canada – SK	SK CIC	1947	16
Italy	CDP Equity	2011	13
China	CADF	2007	10
Indonesia	INA	2020	6
India	NIIF	2015	4
Spain	COFIDES	1988	4
Nigeria	NSIA	2011	3
Angola	FSDEA	2012	3
Egypt	TSFE	2018	2
Vietnam	SCIC	2006	2
Gabon	FGIS	2012	2
Morocco	Ithmar Capital	2011	2
Palestine	PIF	2003	1
Bolivia	FINPRO	2015	0,4

AUM (assets under management) figures from Global SWF, January 2023
Engagement in food/farmland/agriculture assessed by GRAIN

[1] Important sources used for this report include: Javier Capapé (ed), “Sovereign wealth funds 2021”, IE University, Madrid, Oct 2022, https://docs.ie.edu/cgc/SWF%202021%20IE%20SWR%20CGC%20-%20ICEX-Invest%20in%20Spain.pdf; Global SWF, “2023 Annual report”, New York, Jan 2023, https://globalswf.com/reports/2023annual; the websites of Global SWF (https://globalswf.com) and SWF Institute (https://www.swfinstitute.org/) as well as Preqin Ltd.

[2] See the COFIDES database, sector “Agri-food”, https://www.cofides.es/en/projects?field_direccion_country_code=All&field_sector_target_id=2

[3] Reuters, “Sudan to develop Red Sea port in $6-bln initial pact with Emirati group”, 13 Dec 2022, https://www.farmlandgrab.org/31347.

[4] Ella Nilsen, “Wells are running dry in drought-weary Southwest as foreign-owned farms guzzle water to feed cattle overseas“, CNN, 27 Nov 2022, https://edition.cnn.com/2022/11/05/us/arizona-water-foreign-owned-farms-climate/index.html

[5] See SALIC website: https://salic.com/

[6] AeroFarms, “PIF and AeroFarms sign joint venture agreement to build indoor vertical farms in Saudi Arabia and the wider MENA region”, 1 Feb 2023, https://www.aerofarms.com/2023/02/01/pif-and-aerofarms-sign-joint-venture-agreement-to-build-indoor-vertical-farms-in-saudi-arabia-and-the-wider-mena-region/

[7] Public Investment Fund, “Public Investment Fund Green Finance Framework”, February 2022, https://www.pif.gov.sa/Investors%20Files%20EN/PIF%20Green%20Finance%20Framework.pdf

[8] See Hassad Food, “Hassad signs MoU with Baiterek to discuss investment projects that supports food security”, 12 Oct 2022, https://www.hassad.com/2022/10/12/hassad-signs-mou-with-baiterek-to-discuss-investment-projects-that-supports-food-security/ and Global Sovereign Wealth Fund, “Gulf funds drawn into soft power battle over Kazakhstan”, 25 Aug 2021, https://globalswf.com/news/gulf-funds-drawn-into-soft-power-battle-over-kazakhstan

[9] See Hassad Food, “Strategic local and international investments along with global partnerships to satisfy the market needs from grains and wheat”, 28 Mar 2022, https://www.hassad.com/2022/03/28/strategic-local-and-international-investments-along-with-global-partnerships-to-satisfy-the-market-needs-from-grains-and-wheat/

[10] Reuters, “Commodity group Louis Dreyfus completes stake sale to ADQ”, 10 Sep 2021, https://www.reuters.com/world/middle-east/commodity-group-louis-dreyfus-completes-stake-sale-adq-2021-09-10/.

[11] See Fabiano Maisonnave, “Norway oil fund omits meatpacker JBS from deforestation watch list “, Climate Fund News, 4 Apr 2018, https://www.climatechangenews.com/2018/04/04/norway-oil-fund-omits-meatpacker-jbs-deforestation-watch-list/, Earthsight, “World’s largest pension fund dumps shares in beef firm in wake of corruption scandal”, 24 July 2018, https://www.earthsight.org.uk/news/idm/worlds-largest-pension-fund-dumps-shares-beef-firm-wake-corruption-scandal and Paulina Pielichata, “Norway sovereign wealth fund divests Halcyon over environmental concerns”, Pensions & Investments, 27 Mar 2019, https://www.pionline.com/article/20190327/ONLINE/190329915/norway-sovereign-wealth-fund-divests-halcyon-over-environmental-concerns

[12] “L’Afrique sur le chemin de l’autosuffisance alimentaire”, Seneplus, 27 Feb 2023, https://www.seneplus.com/developpement/lafrique-sur-le-chemin-de-lautosuffisance-alimentaire

[13] Main sources for this box are each fund’s respective website, news clippings and Preqin Ltd.

[14] Arise, “Bpifrance and Arise IIP establish a partnership to foster agricultural materials processing and co-industrialisation projects on a pan-African scale”, 15 February 2023, https://www.ariseiip.com/bpifrance-and-arise-iip-establish-pan-african-partnership/ , and Benjamin König, “Arise IIP, la firme qui dépouille les paysans africains”, L’Humanité, 4 April 2023, https://www.humanite.fr/monde/tchad/arise-iip-la-firme-qui-depouille-les-paysans-africains-789407

Source: Grain

SPECIAL REPORTS AND PROJECTS

Maasai demand Volkswagen pull out of carbon offset scheme on their lands

Published

1 week ago

July 24, 2025

witnessradio.org

Maasai Indigenous people in Tanzania have called on Volkswagen (VW) to withdraw from a controversial carbon credits scheme which violates their rights and threatens to wreck their livelihoods.

In a statement, the Maasai International Solidarity Alliance (MISA) denounced the “loss of control or use” of vital Maasai grazing grounds, and accused VW of making “false and misleading claims” about Maasai participation in decision making about the project.

Many Maasai pastoralists have already been evicted from large parts of their grazing lands for national parks and game reserves, with highly lucrative tourist businesses operating in them. Now a major new carbon-credit generating project by Volkswagen ClimatePartner (VWCP) and US-based carbon offset company Soils for the Future Tanzania is taking control of large parts of their remaining lands, and threatening livelihoods by upending long-standing Maasai grazing practices.

The Maasai have not given their free, prior and informed consent for the project. They fear it will restrict their access to crucial refuge areas in times of drought, and threaten their food security.

Ngisha Sinyok, a Maasai community member from Eluai village, which is struggling to withdraw from the project, told Survival: “Our livestock is going to be depleted. We will end up not having a single cow.” Asked about VW’s involvement in the project, he replied, “It is not a solution to climate change. It is just a business for people to make money using our environment. It has nothing to do with climate change.”

Another Maasai man, who wished to remain anonymous for fear of reprisals, said: “They use their money to control us.” A third said: “Maasailand never had a price tag. In Maasailand, there is no privatization. Our land is communal.”

Survival International’s Director of Research and Advocacy, Fiona Watson, said today: “The carbon project that Volkswagen supports violates the Maasai’s rights and will be disastrous for their lives, all so the company can carry on polluting and greenwash its image. It takes away the Maasai’s control over their own lands and relies on the false and colonial assumption that they are destroying their lands — which is not supported by evidence.

“The Maasai have been grazing cattle on the plains of East Africa since time immemorial. They know the land and how to manage it better than carbon project developers seeking to make millions from their lands.”

VW’s investment in the project, whose official name is the “Longido and Monduli Rangelands Carbon Project”, is believed to run to several million dollars, and has contributed to corruption and tensions in northern Tanzania, according to MISA’s report on the project.

An adjacent project in southern Kenya, also run by Soils for the Future, is beset with similar problems, and has already sparked resistance from local communities.

Survival International’s Blood Carbon report revealed that the whole basis for these “soil carbon” projects is flawed, and unsupported by evidence. Survival documented similar problems with the highly controversial Northern Kenya Grasslands Carbon Project. That project suffered a blow in a Kenyan court and was suspended and put under review by Verra, the carbon credit verification agency, for an unprecedented second time.

Source: Survival International

SPECIAL REPORTS AND PROJECTS

Seizing the Jubilee moment: Cancel the debt to unlock Africa’s clean energy future

Published

3 weeks ago

July 12, 2025

witnessradio.org

Africa has the resources and the vision for a just energy transition, but it is trapped in a financial system structured to take more than it gives. In this blog, we outline how debt burdens and climate impacts are holding the continent back, and looks at the role of institutions that shape the global financial order, like the World Bank, African Development Bank and IMF. As these institutions and governments meet in Seville for FfD4, we urge them to heed people’s calls for reform: cancel the debt, redistribute the wealth, and fund the just transition. — By Rajneesh Bhuee and Lola Allen

With 60% of the world’s best solar energy resources and 70% of the cobalt essential for electric vehicle batteries, the African continent has everything it needs to power its development and become a global reference point for sustainable energy production. That potential, however, remains largely untapped; Africa receives just 2% of global renewable energy investment. As the UNCTAD Secretary-General Rebeca Grynspan warns, too many countries are forced to “default on their development to avoid defaulting on their debt.”

The cost of servicing unsustainable debts, layered with new loan-based climate and development finance, leaves governments with little fiscal space to invest in clean energy, health or education. In 2022 alone, African countries spent more than $100 billion on debt servicing, over twice what they spent on health or education. Add to this the $90 billion lost annually to illicit financial flows, and the reality is stark: more money leaves the continent through financial leakages (also including unfair trade and extractive investment) than comes in through productive, equitable and development-oriented finance.

These are not isolated problems. They reflect a financial system that has been built to serve global markets rather than people. Between 2020 and 2025, four African countries defaulted on their external debts, that is, they failed to make scheduled repayments to creditors like the International Monetary Fund or bondholders, triggering fiscal crises and, in several cases, IMF interventions tied to austerity measures. Pope Francis’ Jubilee Report (2025) and hundreds of civil society groups argue that these defaults reflect the deeper crisis of unsustainable debt. Meanwhile, 24 more African countries are now in or near debt distress. None have successfully restructured their debts under the G20 Common Framework, a mechanism launched in 2020 to facilitate debt relief among public and private creditors. The Framework has been widely criticised for being slow, opaque and ineffective. According to Eurodad, without urgent systemic reforms, up to 47 Global South countries, home to over 1.1 billion people, face insolvency risks within five years if they attempt to meet climate and development goals.

How debt undermines the just energy transition

Debt has become both a driver and a symptom of climate injustice. Countries that did the least to cause the climate crisis now pay the highest price, twice over. First, they suffer the impacts. Second, they must borrow to rebuild.

This is happening just as concessional finance disappears. The US has withdrawn from the African Development Fund’s concessional window (worth $550m), yet maintains influence over private-sector lending. It has also opted out of the UN Financing for Development Conference (FfD4), a historic opportunity to confront the injustice of our financial system. Meanwhile, European governments, though now celebrating themselves as defenders of multilateralism, played a key role in weakening the outcome of FfD4, slashing aid budgets, redirecting funds toward militarisation, and systematically blocking proposals for a UN-led sovereign debt workout mechanism. With rising insecurity and geopolitical tensions, these actions send a troubling signal: at a moment when global cooperation is urgently needed, many Global North countries are stepping back from efforts to fix the very system that is preventing climate justice and clean energy for much of the Global South.

A role for the AfDB?

The African Development Bank (AfDB), under incoming president Sidi Ould Tah , has made progressive commitments of $10 billion to climate-resilient infrastructure and $4 billion to clean cooking. Between 2022 and 2024, one in five (20%) of its energy dollars were grants, far exceeding The World Bank ‘s 10% and the Asian Development Bank (ADB) ‘s 3.8%. The AfDB has also backed systemic reform: for example, calling for Special Drawing Rights (SDR) redistribution, launching an African Financial Stability Mechanism that could save up to $20 billion in debt servicing, and consistently advocating for fairer lending terms.

Yet, even progressive leadership struggles within a broken system. Recourse’s recent research shows that AfDB energy finance dropped 67% in 2024, from $992.7 million to just $329.6 million. Of this, a staggering 73% went to large-scale infrastructure like mega hydro dams and export-focused transmission lines, ‘false solutions’ that bypass the energy-poor and displace communities. Meanwhile, support for locally-appropriate, decentralised renewable energy systems such as mini-grids, solar appliances, and clean cookstoves plummeted by over 90%, from $694.5 million to just $61 million, with only five of 13 projects directly addressing energy access in 2024.

Africa received just 2.8% of global climate finance in 2021–22, and what is labelled as “climate finance” is often little more than a Trojan horse: resource-backed loans, debt-for-nature swaps, and blended finance instruments that shift risk to the public while offering little real benefit to local communities. These mechanisms, promoted as “innovative” or “green”, often entrench financial dependency and fail to deliver meaningful change for energy-poor or climate-vulnerable groups.

Meanwhile, initiatives that could build green industry and renewable capacity across Africa are falling short in both scale and speed. Flagship projects, such as the EU’s Global Gateway, have failed to drive green industrialisation in Africa, and carbon markets continue to delay real emissions reductions, subsidise fossil fuel interests, and entrench elite control over land and resources.

Mission 300: Ambition or another missed opportunity?

In this constrained context, the AfDB and World Bank launched Mission 300, an ambitious plan to connect 300 million Africans to electricity by 2030. Pragmatic goals like electrification are crucial, but the story beneath the surface of Mission 300 raises concern. Far from serving households, many projects under the initiative appear more aligned with export markets and large-scale energy users, echoing decades of infrastructure that bypasses those most in need.

Mission 300 can still be transformative, but only if it centres people, not profits. Energy access must begin with those who need it most: women and youth, especially in rural communities. Across Africa, many women cook over open fires, walk hours to gather fuel, and care for families in homes without light or clean air. This is not just an inconvenience, it is structural violence and policy failure.

Yet most energy finance still flows to centralised grids, mega-projects, and sometimes fossil gas (misleadingly called a “transition fuel”). These do little to address energy poverty. Locally appropriate decentralised renewable energy solutions, solar-powered appliances, clean cookstoves, and mini-grids can deliver faster, cheaper, and more equitable impact. Mission 300 must invest in such solutions, without adding to existing debt problems. It should support national policy design, for example, by ensuring that energy policy is responsive to women’s needs, making use of gender-disaggregated data and community consultation.

The Jubilee: A year for action

In a year already marked as a Jubilee moment, African leaders have demanded reform: including a sovereign debt workout mechanism and a UN Tax Convention to end illicit financial flows. Yet as AFRODAD has documented, these demands were blocked at the FfD4 negotiations by wealthy nations—notably the EU and UK—even as climate impacts grow and fiscal space shrinks.

This is not just about finance. It is about reclaiming sovereignty. The incoming AfDB president and all the multilateral development banks face a choice: continue financing extractive, large-scale projects that serve foreign interests, or invest in decentralised, gender-responsive, pro-people solutions that shift power and ownership.

Africa has the resources. What it needs is fiscal space, public-led finance, and global rules that prioritise people and planet over profit. The Jubilee call is clear: cancel the debt, redistribute the wealth, and fund the just transition.

Source: Recourse through LinkedIn Account Recourse.

SPECIAL REPORTS AND PROJECTS

Activism on Trial: Despite the increasing repressive measures, Uganda’s EACOP protesters are achieving unexpected victories in the country’s justice systems.

Published

3 weeks ago

July 8, 2025

witnessradio.org

Special report by the dedicated and thorough Witness Radio team, offering a comprehensive and in-depth overview of the situation.

As Uganda moves forward with the controversial East African Crude Oil Pipeline (EACOP), a wave of arrests, intimidation, and court cases has targeted youth and environmental activists opposing the project. However, there is a noticeable and encouraging shift within Uganda’s justice systems, with a growing support for the protesters, potentially signaling a change in the legal landscape.

The EACOP project, stretching 1,443 kilometers from Uganda to Tanzania, has been hailed by the government as a development milestone. However, human rights groups and environmental watchdogs have consistently warned that the project poses serious risks to communities, biodiversity, and the climate. Concerns over land grabbing, inadequate compensation, and ecological degradation have mobilized a new generation of Ugandan activists.

Since 2022, as opposition to EACOP grew louder, Ugandan authorities have intensified a campaign of arrests and legal harassment. Police, military, and currently the Special Forces Command, a security unit tasked with protecting Uganda’s president, have been involved in brutal crackdowns on these activists.

Yuda Kaye, the mobilizer for students against EACOP, believes the criminalization is an attempt by the government to weaken their cause and silence them from speaking out about the project’s negative impacts.

“We are arrested just for raising the project concerns, which affect our future, the local communities, and the environment at large. Oftentimes, we are arrested without reason. They just round us up at once and brutally arrest us, Mr. Kaye reveals, in an interview with Witness Radio’s research team.

Activists have faced a litany of charges, including unlawful assembly, incitement to violence, public nuisance, and criminal trespass. Many of these charges have lacked substantive evidence and have been dismissed by the courts or had their files closed by the police after prolonged delays.

A case review conducted by Witness Radio Uganda reveals that Uganda’s justice system is being used to suppress the activities of youth activists opposing the project, rather than convicting them. However, despite the system being used to silence them, it has often found no merit in these cases.

Of a sample of 20 documented cases since 2022 involving the arrest of over 180 activists, 9 case files against the activists have either been dismissed by courts or closed by the police due to a lack of prosecution, another signal indicating the relevance of their work, while 11 cases remain ongoing.

The chart below shows trends in arrests, dismissed cases, and ongoing cases involving EACOP activists in Uganda from 2022 to May 2025.

The review was conducted with support from the activists themselves and their lawyers. It involved a desk review and analysis of Witness Radio articles concerning the arrests of defenders and activists opposing the EACOP project.

Witness Radio’s analysis reveals a concerning trend as the majority of cases involving these activists are stalling at the police level rather than progressing to the courts of law. This suggests that the police have not only criminalized activism but are also playing a syndicate role in deliberately prolonging these cases under the excuse of ongoing investigations.

“While both the police and judiciary are being used to suppress dissent, the courts have at least demonstrated a degree of fairness, having dismissed at least 78% of cases that fall within their jurisdiction. In contrast, the police continue to hold 73% of activist cases in limbo, citing investigations as justification for indefinite delays.” The research team discovered.

Witness Radio’s analysis further shows that in most of these cases, the state has failed to produce witnesses or evidence to convict the activists, adding that the charges are often just tools of intimidation. Additionally, this is accompanied by more extended periods during which decisions are being made.

Despite the intense crackdown, it is evident that these activists are winning, as no proven record of sentencing has been observed. Instead, these cases are often marred by delays in court or at the police, and in the end, some have been dismissed. This implies that protest marches and petition deliveries serve a purpose; the state just needs to listen to their concerns and formulate possible solutions to address them,” said Tonny Katende, Witness Radio Uganda’s Research, Media and Documentation Officer.

According to Article 29(1)(d) of the Constitution of Uganda, every individual has the right to “assemble and demonstrate together with others peacefully and unarmed and to petition.” Additionally, Article 20 emphasizes that fundamental rights and freedoms “are inherent and not granted by the State.” Yet activists report that police regularly deny them the right to exercise their rights as guaranteed.

At a February 2025 press conference, EACOP activists strongly condemned the police’s continued unlawful arrests of demonstrators exercising their constitutional rights and case delays. This followed escalating crackdowns that added to the tally of over 100 activists arrested in 2024 alone.

“We strongly condemn these arrests. Detaining demonstrators does not address the concerns affecting grassroots communities impacted by oil and gas projects,” declared the group, led by Bob Barigye, who remains in prison on another charge still linked to his opposition to EACOP.

An interview with Mr. Yuda Kaye, a mobilizer from the Students Against EACOP Movement, confirmed that the ongoing dismissals only reaffirm the legitimacy of their resistance.

“These cases are dismissed because the government and its justice systems don’t have any grounds to convict us. This justifies the fact that the issues we’re discussing are real. We only seek accountability, but since the government has power, they criminalize us and silence us,” Mr. Kaye added.

According to Kaye, the intimidation is real, but so is their commitment. “We are called enemies of progress, but we’re only protecting our future and that of our country. We’ve often proposed alternatives, but the government doesn’t want them.” He re-echoes.

Despite this, activists say their rights are routinely violated. Witness Radio Uganda attempted to contact the police spokesperson, Mr. Kituuma Rusooke, but known numbers were unreachable, and messages sent to him went unanswered.

In a separate interview with Mr. James Eremye Mawanda, the Judiciary Spokesperson, he acknowledged the pattern of dismissals and delays.

“As the Judiciary, we listen to cases, and where there is no evidence to support the case, a decision is made. When a crime is allegedly committed and an individual is brought before the court, the courts upholding the rule of law shall administer justice,” he said.

According to Witness Radio’s analysis, 2025 has seen the most dismissals so far, with six cases concluding, reinforcing the view that criminalization is used more for intimidation than as a means of legal redress. “Whereas the arrests took place in separate years, most of the dismissals have happened in 2025,” the research team further highlighted.

Mr. Brighton Aryampa, the team lead of Youth for Green Communities, one of the organizations that provide legal representation for Stop-EACOP activists, highlighted that the criminalization of Ugandan activists undermines Uganda’s democratic principles of free expression and open discourse.

“The government, in bed with oil corporations Total Energies and CNOOC, is deliberating using legal action against Stop EACOP activists to suppress dissent, free speech, right to peaceful protest, and against public participation. This is tainting Uganda as a country that undermines the democratic principles of free expression and open discourse, as hundreds of Stop EACOP activists have been arrested, charged, and some tried by a competent court. However, no one has been found guilty of the fabricated offense usually slapped on them.” He said in an interview with Witness Radio.

Counsel Aryampa further advised that the practice of powerful companies and businesses blackmailing and corrupting the Ugandan government to develop harmful projects while ignoring all social warnings and human rights abuses must be stopped.

The pressure exerted by these activists, both locally and internationally, has slowed the EACOP project. It has also led to bankers and insurers withdrawing from financing or insuring the project. According to Stop EACOP campaigners, more than 40 international banks and 30 global insurance firms, including Chubb, have distanced themselves from the controversial pipeline project, citing human rights and climate concerns raised by these activists.

Meanwhile, as the activism grows, the number of arrests is rising. Within just the first six months of 2025, over 40 activists have been criminalized for their activism. Among them is KCB 11, a group of eleven activists that was arrested at the KCB offices in April 2025. The group has spent over two months on remand, despite their lawyers’ pleas for bail to be granted.