Olufemi Adeyemi 

African oil-producing countries have successfully obtained 45% of the financing required for the establishment of the Africa Energy Bank.

African oil-producing countries have successfully secured 45 percent of the initial $5 billion needed to launch the Africa Energy Bank (AEB), which is intended to finance oil projects throughout the continent due to insufficient funding from international markets. 

Key early investors in the Africa Energy Bank include Nigeria, Angola, and Ghana, as noted by Omar Farouk Ibrahim, the secretary-general of the African Petroleum Producers Organisation (APPO). 

Ibrahim highlighted during the Angola oil and gas conference, as reported by Bloomberg, that “we are likely the first development bank to transition from concept to near realization in just over two years.” 

In 2022, APPO and the African Export-Import Bank (Afreximbank) entered into preliminary agreements to establish the Africa Energy Bank. The institution is designed to function as an independent, supranational pan-African energy development entity, with an initial capital of $5 billion. 

In June, Afreximbank and APPO completed the Establishment Agreement and Charter for the Africa Energy Bank during a ceremony in Egypt, marking the end of two years of negotiations and preparations to operationalize the AEB. 

The creation of the AEB is a response to the impending funding crisis facing Africa’s oil and gas sector, exacerbated by the global transition towards cleaner energy sources. 

Afreximbank noted in June that “traditional financiers, who have supported Africa for decades, are withdrawing their backing, particularly in the region, citing climate change concerns as the main reason.” 

Ibrahim pointed out that “Africa’s oil and gas sector has been overly dependent on external funding for too long. We had taken foreign investment for granted in our oil and gas initiatives, but the energy transition has revealed that those we relied on for many years are now distancing themselves from us.” 

He stressed that Africa cannot afford to rapidly shift away from fossil fuels, especially given that it has the largest population in the world without access to energy.