Africa moves to tackle $200bn energy funding gap

By Yunus Abubakar

The African Export-Import Bank (Afreximbank) and the African Petroleum Producers’ Organization (APPO) have launched the Africa Energy Bank with an authorised capital of $5bn to address financing challenges facing the continent’s energy sector.

The bank was formally launched on Saturday during its inaugural general meeting in Abuja.

The institutions said the establishment of the bank was coming at a critical time when Africa’s energy investment requirements were estimated at $200bn.

They expressed concern that traditional sources of short- and long-term financing for the continent’s energy sector were withdrawing funding from fossil fuel projects, despite the continued importance of oil and gas to Africa’s energy needs.

“The Bank is being established at a time when the continent’s energy investment needs are estimated at US$200bn,” the organisations said in a joint statement.

“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.”

They said the Africa Energy Bank was designed to bridge the financing gap while supporting a just energy transition across African countries.

According to the institutions, the bank will operate as an independent, supranational pan-African financial institution, attracting investments from governments, national oil companies, financial institutions and private investors.

With its $5bn authorised capital, the bank is expected to finance projects across the energy value chain, including exploration, production, transportation, processing, refining and distribution.

The institutions said the initiative would strengthen African participation in the energy industry, reduce dependence on imported petroleum products and promote intra-African energy trade.

The inaugural meeting also witnessed the appointment of Helmy Ghazi as the bank’s first president and the constitution of its maiden board of directors.

The board comprises representatives from the public and private sectors, as well as policy institutions 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,” the statement added.

The organisations said the establishment of the bank was part of efforts to mobilise indigenous and international capital to support Africa’s energy development