Africa Energy Bank Poised to Launch Operations in 2024 with $5 Billion Capital.
In a significant stride for the African energy sector, the Africa Energy Bank, a collaborative venture between the African Export-Import Bank (Afreximbank) and the African Petroleum Producers Organization (APPO), is set to commence operations later this year. As reported by Reuters on Wednesday, a senior official shared insights, indicating an initial capital injection of $5 billion into the bank.
The primary aim of the Africa Energy Bank is to direct investments into oil and gas projects across the continent, addressing crucial funding shortfalls at a time when major financial institutions face increasing pressure to move away from environmentally unfriendly energy ventures.
Zakaria Dosso, the Managing Director of Africa Energy Investment Corporation (AEICORP), the investment arm of APPO, stressed the importance of Africa establishing its financial capacity to nurture and develop its strategic energy sector independently.
Dosso disclosed significant contributions from key African nations, with Ghana recently depositing over $20 million into AEICORP, joining Nigeria and Angola, Africa’s leading crude oil producers, which each contributed $10 million last year.
“The Africa Energy Bank is nearing fruition and is slated for an official launch in the latter part of 2024,” emphasized Dosso, highlighting the imminent milestone for the continent’s energy financing landscape.
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Member countries across Africa are expected to contribute a minimum of $83 million each, totaling approximately $1.5 billion. Afreximbank and APPO will match this amount as founding members, with the remaining $2 billion anticipated from various investors, including Middle Eastern sovereign wealth funds.
The process of selecting the bank’s headquarters is underway, with six countries – Algeria, Benin, Cote d’Ivoire, Ghana, Nigeria, and South Africa – vying for hosting rights. Egypt has withdrawn its application, leaving a shortlist for evaluation by Afreximbank and APPO, with final decision-making to be conducted through ministerial deliberations.
The establishment of the Africa Energy Bank, initially proposed during the 3rd African Local Content Roundtable in Abuja, marks a significant stride towards strengthening Africa’s energy financing capabilities and advancing sustainable development across the continent’s crucial energy sectors.
