The Africa Energy Bank, slated to kick off operations this year with an initial capital base of $5 billion, is poised to provide funding for oil and gas projects across the continent, Reuters reports.
The bank, a collaborative effort between Afreximbank and the African Petroleum Producers Organization (APPO), aims to address financial shortfalls within Africa’s energy sector.
This comes as major banks face mounting pressure from environmental advocates to divest from fossil fuel projects impacting the climate.
Zakaria Dosso, managing director of Africa Energy Investment Corporation (AEICORP), revealed that Ghana recently deposited just over $20 million to AEICORP, becoming the third African nation to contribute after Nigeria and Angola, each of which donated $10 million last year to bolster the bank’s financing efforts.
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Dosso emphasized the need for Africa to establish its financing capabilities to develop this critical sector, underscoring the rationale behind the Africa Energy Bank’s imminent launch, anticipated in the second half of 2024.
Each African member country is expected to contribute at least $83 million, aiming for a collective total of approximately $1.5 billion. Founding members Afreximbank and APPO are also anticipated to provide matching funding.
The remaining $2 billion is slated to be raised from alternative sources, potentially including sovereign wealth funds from the Middle East.
Dosso, part of the temporary leadership team tasked with establishing the Africa Energy Fund (AFE), noted that six nations—Algeria, Benin, Cote d’Ivoire, Ghana, Nigeria, and South Africa—are competing to host AFE’s headquarters, with Egypt withdrawing its earlier bid.
Dosso explained that Angola, Libya, Senegal, Venezuela, and Afreximbank, as members of the selection committee, will assess all applicants and present their findings before ministers make a final decision.