Afreximbank, APPO Formally Establish $5bn Africa Energy Bank

By Adedapo Adesanya

The African Export-Import Bank (Afreximbank) and the African Petroleum Producers’ Organisation (APPO) have formally established the Africa Energy Bank (AEB), a pan-African financial institution designed to address the continent’s energy financing gap and support investments across the oil and gas value chain.

The announcement was made over the weekend at the bank’s inaugural general meeting at its headquarters in Abuja, where members approved resolutions setting its governance structure in motion.

With an authorised capital of $5 billion, the institution is expected to mobilise funding for energy projects across Africa, whose energy investment requirements are estimated at $200 billion.

The establishment comes amid growing concerns over the withdrawal of traditional international lenders from financing fossil fuel projects, despite the continued importance of oil and gas to Africa’s energy security and industrial development.

Afreximbank and APPO said the bank would help bridge the financing shortfall while supporting a just energy transition that reflects the development priorities of African countries.

Its mandate covers the entire energy value chain, including exploration and production, transportation, processing, refining and distribution.

The bank is also expected to strengthen Africa’s productive capacity, reduce dependence on imported petroleum products, promote intra-African trade in energy commodities and increase African ownership and participation in the continent’s energy industry.

Its promoters noted that investments in energy generation and transmission would be critical to accelerating industrialisation and positioning African economies to benefit from emerging technologies, particularly artificial intelligence.

The Africa Energy Bank will operate as an independent, supranational pan-African financial institution, with plans to attract investments from governments, national oil companies, financial institutions and private investors.

At the inaugural general meeting, members approved the appointment of Mr Helmy Ghazi as the bank’s first president and constituted its inaugural Board of Directors, comprising representatives from the public and private sectors, as well as policy institutions across the continent.

The meeting was attended by the Minister of State for Petroleum Resources (Oil), Mr Heineken Lokpobiri; President and Chairman of the Board of Directors of Afreximbank, Mr George Elombi; and Côte d’Ivoire’s Minister of Mines, Petroleum and Energy, Mr Mamadou Sangafowa-Coulibaly.

After many delays, the establishment of the lender represents an effort by African governments and institutions to develop indigenous financing capacity for the continent’s energy sector as access to international capital for oil and gas projects becomes increasingly constrained.