What exactly is political risk, and why does it matter for energy investment in Africa? In this conversation with Khadija Alaoui, we trace the concept from its origins in the banking sector to its use in analyzing oil and gas investment, and examine how the European Union shapes the way political risk is understood and assessed. In this video:

• How political risk is defined, and why banks first framed it as “non-economic risk”

• Micro- vs. macro-political risk, and Robock’s 1971 definition

• Why political risk is considered a theoretically underdeveloped concept

• The main features of Africa’s energy sector and the risks facing oil and gas investment, from social unrest and civil wars to regulatory change and maritime boundary disputes

• The EU’s three key mechanisms: ESG standards, due diligence requirements, and taxonomy

• The role of the private political risk industry, including political risk insurance

• Europe’s dilemma between promoting sustainability and good governance and securing access to African oil and gas after the invasion of Ukraine

• Local development, forced displacement, pollution, and the EU’s security-development nexus