Afreximbank, APPO to Establish African Energy Bank
By Adedapo Adesanya
A Memorandum of Understanding (MoU) for the establishment of a multi-billion dollar African energy bank has been signed between the African Export-Import Bank (Afreximbank) and the African Petroleum Producers Organization (APPO).
The institution will scale up private sector investment in African oil and gas projects and will not be a substitute for private investment but serve as a catalyst for Africa-directed investment.
As per terms of the MoU, the bank will provide critical financing for new and existing oil and gas projects, as well as energy developments across the entire value chain.
This will help strengthen the continent’s energy sector which has been further weakened by international oil company divestment and the shift in global investment trends.
The MoU was signed by Mr Rene Awambeng, Director & Global Head, Client Relations, Afreximbank, and Mr Omar Farouk, Secretary General of APPO, in the presence of Mr João Lourenço, President of the Republic of Angola, APPO Ministers and Mr NJ Ayuk, African Energy Chamber (AEC) Executive Chairman.
The proposed African Energy Bank will operate in the same way as the APPO-created Africa Energy Investment Corporation – a developmental financial institution created to channel resources towards the development of Africa’s energy sector.
“The African Energy Chamber has been pushing for the creation of an African Energy Bank, one that is African-based and Africa-focused, and I am proud to announce that the Afreximbank and APPO have taken the first steps towards its creation.
“The bank will be critical for Africa’s energy sector, serving as a catalyst – not a substitute – for private investment in African energy. This is a practical strategy for prosperity and a pragmatic vision that must be embraced by all who want to make energy poverty history and fight climate change.
“Why should our pension funds go to European banks who say they will not finance Africans and call us risky? We need to use that money to finance oil and gas,” Mr Ayuk said.
Based in Africa, the bank will operate as an independent entity, regulated and led by experienced professionals that know and understand Africa’s energy needs.