African Export-Import Bank (Afreximbank) and the African Petroleum Producers’ Organisation (APPO) have established the pioneer Africa Energy Bank (AEB) in Abuja, Nigeria.
The announcement was made during the AEB’s inaugural general meeting held in Abuja over the weekend.
According to Afreximbank in a statement, “The creation of the Africa Energy Bank reaffirms African governments’ determination to secure their own energy future.
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“This move is in recognition that significant investments in energy generation and transmission was required to accelerate industrial growth and to leverage the tremendous opportunities from the emerging technologies, particularly Artificial intelligence (AI).”
It added, “AEB is being established at a time when the continent’s energy investment needs are estimated at $200 billion.
“Traditional providers of short- and long-term financing to Africa’s energy sector are withdrawing funding from fossil fuels, even as oil and gas remain vital to the continent’s energy systems. The Africa Energy Bank aims to bridge this financing gap while supporting a just energy transition for African countries.”
With an authorised capital of $5 billion, the AEB will support projects across the energy value chain, including exploration and production, transportation, processing, refining, and distribution.
Afreximbank said the investments by the two African organisations were intended to strengthen productive capacity, reduce reliance on imported petroleum products, and promote intra-African trade in energy goods.
AEB’s mandate includes promoting robust African participation in the continent’s energy sector to ensure that Africa’s energy future is shaped by Africans.
The AEB will operate as an independent, supranational pan-African financial institution and seek to attract investments from governments, national oil companies, financial institutions, and private investors to support energy development across the continent.
Resolutions passed at the first general assembly included the appointment of the bank’s inaugural President, Mr Helmy Ghazi, and the formation of its first Board of Directors, comprising members from the public and private sectors as well as leading policy institutions from across the continent.
Most significantly, shareholders approved 4 January 2027 as the Bank’s official operational commencement date.
What it means for Nigeria
The Africa Energy Bank is conceived as a standalone financial institution dedicated to addressing the financing gap confronting its energy sector.
With a mandate spanning hydrocarbons, oil and gas infrastructure, energy trading and renewable energy, the Bank can mobilise capital, unlock strategic investments, strengthen regional energy security and support sustainable economic development across the continent.
For Nigeria, experts say securing the Bank’s headquarters represents an important strategic achievement and an opportunity to deepen its position as a financial and energy investment hub.
This milestone is also the culmination of an important continental collaboration involving APPO, Afreximbank, participating member countries and industry institutions.
They say Africa must move beyond the abundance of its natural resources to build the financial institutions, infrastructure and markets capable of converting those resources into prosperity, industrialisation, employment and opportunity for the next generation.
Background
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.
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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 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.
