Victor EzejaThe Africa Energy Bank will begin operations in the first quarter of 2025 with $5 billion in equity from member countries and shareholders, and targets an asset base of $120 billion.
Nigeria’s Minister of State Petroleum Resources (Oil), Heineken Lokpobiri, made this known on Tuesday, at Sub-Saharan Africa International Petroleum Exhibition and Conference (SAIPEC) in Lagos.
“The building is ready, and we are only putting finishing touches to it, by the end of this quarter, this bank will take off,” Lokpobiri stated.
The Energy bank which was created through a partnership between African Petroleum Producers Organisation (APPO) and Afrexim Bank, is designed to finance oil and gas projects and facilitate Africa’s energy transition objectives.
Following pressure from environment-based organisations on major financial institutions to divert investment funds from oil and gas projects that contribute to climate change, the proposed energy bank would help to close funding gap in the continent.
Highlighting the importance of the African Energy Bank (AEB), Lokpobiri said it “represents a shift toward financial autonomy,” adding that it paves the way for the continent “to move away from dependency on foreign capital and external policies that do not align with Africa’s development priorities.”
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To guarantee that African countries can compete on a global scale, the minister advocated increased regional cooperation, investments in human resources, and innovation. He, however, cautioned that the continent runs the risk of abandoning millions of people in the transition to cleaner energy if energy poverty is not addressed.
The minister suggested that Africa should adopt a balanced approach in keying into the global agenda of energy transition. Accordimg to him, the continent should adopt a two-way strategy. One is investing in renewable energy sources to ensure long-term energy stability, while the other strategy should focus on optimising hydrocarbon resources to diversify economies.
The idea of creating AEB was first birthed on 15 May 2022 during the 42nd session of the APPO Ministerial Council held in Angola, where a resolution was passed, directing the APPO Secretary-General and the Director of the Africa Energy Investment Corporation (AEICORP) to negotiate with Afreximbank on the creation of the Africa Energy Bank.
In March 2024, the APPO Secretary-General announced that AEB had begun receiving contributions from APPO member states.
During the 45th Extraordinary Session of the APPO Ministerial Council in Abuja on 4 July 2024, Nigeria was chosen to host the headquarters of the AEB.
Victor Ezeja is a passionate journalist with six years of experience writing on economy, politics and energy. He holds a Masters degree in Mass Communication.
