After 20-month Delay, $5bn Africa Energy Bank Takes off in Abuja

•Egypt’s Helmy Ghazi picked as pioneer president of 18-member group •New institution positioned to close $200bn funding gap in oil sector Emmanuel Addeh in Abuja The long-awaited $5 billion Africa Energy Bank (AEB) yesterday formally took off in Abuja, following the inauguration of its institutional structures by its promoters, the African Export-Import Bank (Afreximbank) and the African Petroleum Producers’ Organisation (APPO). The bank announced its formal establishment at its inaugural general meeting in Abuja, where an Egyptian, Mr Helmy Ghazi, was appointed its pioneer president and its first Board of Directors was constituted, Afreximbank said yesterday. The development marked the culmination of a process that began in 2022, when African petroleum-producing countries and Afreximbank initiated discussions on establishing a dedicated financial institution to address the continent’s growing energy financing challenges. The bank, with an authorised initial capital of $5 billion, is expected to finance projects across the energy value chain, including oil and gas exploration, production, transportation, processing, refining, and distribution. According to the bank, it was established against the backdrop of an estimated $200 billion in energy investment requirements across Africa and the increasing reluctance of traditional international lenders to finance fossil fuel projects. The concept emerged from concerns among African oil-producing countries that the global energy transition was making it increasingly difficult to secure funding for hydrocarbon developments, despite the continent’s enormous oil and gas resources and widespread energy poverty. Under the arrangement, APPO, which represents 18 African petroleum-producing countries, and Afreximbank are the founding institutions. The APPO member countries are Nigeria, Algeria, Angola, Benin, Cameroon, Chad, the Republic of Congo, the Democratic Republic of Congo, Côte d’Ivoire, Egypt, Equatorial Guinea, Gabon, Ghana, Libya, Namibia, Niger, Senegal, and South Africa. Venezuela is an honorary member of the organisation. Nigeria had committed $100 million towards the bank’s capitalisation, with President Bola Tinubu approving the investment as part of the country’s contribution to the initiative. However, the proposed January 2025 operationalisation deadline was missed, as disagreements over the transfer of equity subscriptions, capital commitments, and other establishment requirements delayed the process. But Afreximbank and APPO said the new institution was designed to bridge the financing gap, particularly as oil and gas continued to play significant roles in Africa’s energy systems, industrialisation and economic development. According to the organisations, the bank will provide financing across the entire energy value chain, including exploration and production, transportation, processing, refining and distribution. Its interventions are also expected to strengthen Africa’s productive capacity, reduce dependence on imported petroleum products and promote intra-African trade in energy commodities. The initiative, according to the promoters, reflects African governments’ determination to take greater control of the continent’s energy future and mobilise indigenous capital to support the development of its resources. The bank said it will operate as an independent, supranational pan-African financial institution, attracting investments from governments, national oil companies, financial institutions, and private investors. According to the statement, the mandate also includes expanding African participation in the energy industry to ensure that the continent’s energy development priorities are increasingly financed and shaped by African institutions. The promoters said the bank’s establishment was also driven by the need for massive investments in energy generation and transmission to accelerate industrial growth and harness opportunities emerging from new technologies, particularly artificial intelligence. The inaugural general meeting was attended by Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri; Afreximbank President and Chairman of its Board of Directors, Dr George Elombi; and Côte d’Ivoire’s Minister of Mines, Petroleum and Energy, Mamadou Sangafowa-Coulibaly.