Nigeria May Win Bid to Host African Energy Bank Headquarters

May 27, 2024
African Energy Bank Headquarters

By Adedapo Adesanya

Nigeria is in the clear to host the $5 billion African Energy Bank headquarters despite a recent aversion to the institution sited in the country.

This is as a technical inspection team comprising representatives from the African Petroleum Producers Organization (APPO) and Afreximbank has concluded its assessment, affirming Nigeria’s readiness to host the headquarters of the African Energy Bank (AEB), slated to be established by July 2024.

After the initial bidding phase earlier this year, Nigeria, alongside Ghana, Benin, and Algeria, emerged as finalists competing for the privilege to host the supranational, multilateral $5 billion energy bank.

This institution aims to finance Africa’s hydrocarbon resources, bolster energy transition efforts, and align with net zero 2060 commitments.

Six nations including Ghana, Egypt, South Africa, Benin Republic, Cote d’Ivoire and Algeria had mounted fierce resistance against Nigeria from hosting the headquarters.

According to a statement signed by the Permanent Secretary of the Ministry of Petroleum Resources, Mr Nicholas Agbo Ella, in preparation for the bid, the Ministry engaged expert opinions from the Federal Ministry of Justice and consultants in January 2024.

Their review and endorsement of the Bank’s proposed Charter, Establishment Agreement, and Headquarters Host Agreement provided the necessary momentum to proceed.

He said the Federal Executive Council (FEC) and National Assembly are now finalizing the ratification process, ensuring that the AEB operates with the required privileges and immunities.

According to the statement, “To demonstrate its commitment, Nigeria has earmarked a prestigious building in Abuja as the temporary headquarters and established a secured data room for the technical team’s scrutiny.”

Additionally, it was revealed that an application for land for the permanent headquarters in Abuja’s Central Business District has been submitted for approval.

“President Bola Ahmed Tinubu has approved a $100 million investment from four Agencies of the Ministry of Petroleum Resources, exceeding the minimum equity requirement of $83.33 million for class A shares. This decision positions Nigeria favourably to win the bid, potentially reshaping the country’s oil and gas ecosystem,” the statement said

The Ministry also confirmed Nigeria’s collaboration with Nigerian National Petroleum Company Ltd. (NNPCL) and the Nigerian Content Development Monitoring Board (NCDMB) to fulfil all eligibility criteria.

Hosting the $5 billion Africa Energy Bank in Nigeria is anticipated to yield significant benefits, including boosting the nation’s GDP, employment, financial architecture, and inclusion, while driving economic diversification and supporting foreign exchange management strategies.

Furthermore, the bank’s presence is expected to catalyze development, exploration, and investment initiatives within the oil and gas sector, enhancing market proximity and scaling up production and capacity.

The launch of the African Energy Bank is projected to attract an additional $2 billion in equity from African Sovereign wealth funds, National oil companies, and other institutional investors, aligning with the bank’s vision and mission. Afrexim-Bank has pledged $1.250 billion as a major investor in class A shares alongside APPO members.

Adedapo Adesanya

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

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