African Oil Nations Raise 45% of $5bn Funds for Africa Energy Bank

African oil-producing countries have secured 45 percent of the initial $5 billion required to establish the Africa Energy Bank (AEB), aimed at financing oil projects across the continent in response to a lack of funding from international markets.

Nigeria, Angola, and Ghana are among the early financial backers of the Africa Energy Bank, according to Omar Farouk Ibrahim, Secretary General of the African Petroleum Producers Organization (APPO).

“We are likely the first development bank to move from concept to near realisation in just over two years,” Ibrahim stated during the Angola Oil & Gas conference, as reported by Bloomberg.

In 2022, APPO and the African Export-Import Bank (Afreximbank) signed initial agreements to establish the Africa Energy Bank.

The bank has been designed as an independent, supranational pan-African energy development institution, with an initial capital of $5 billion.

This June, Afreximbank and APPO finalised the Establishment Agreement and Charter for the Africa Energy Bank in a ceremony held in Egypt. This marked the conclusion of two years of negotiations and preparations to bring the AEB to life.

African oil producers created the AEB to tackle the looming funding crisis in the continent’s oil and gas sector, prompted by the global shift towards cleaner energy.

Afreximbank stated in June that “traditional financiers, on whom Africa has depended for decades, are withdrawing support, particularly in Africa, citing climate change concerns as the primary reason.”

APPO Secretary General Ibrahim remarked, “Africa’s oil and gas sector has relied too heavily on external funding for far too long.

“We had taken foreign investment for granted in our oil and gas projects, but the energy transition has shown us that those we relied on for many decades are now turning their backs on us.”

Ibrahim emphasised that Africa cannot afford to transition rapidly away from fossil fuels, especially as it has the world’s largest population without access to energy.