The Africa Energy Bank, poised to finance oil and gas projects throughout Africa, will commence operations this year with an initial capital base of $5 billion.
The bank is a joint initiative between Afreximbank and the African Petroleum Producers Organisation (APPO), established to counteract the financial deficiency in Africa’s energy sector, particularly as major banks face increased pressure from environmental groups to reallocate investments from fossil fuel projects that affect the climate.
Zakaria Dosso, the managing director of Africa Energy Investment Corporation (AEICORP), revealed that Ghana recently deposited slightly over $20 million into AEICORP, solidifying its position as the third African nation to contribute, following Nigeria and Angola. Both countries had each allocated $10 million last year to bolster the bank’s funding.
He emphasized the need for Africa to establish its financing capacity to facilitate the development of this crucial sector. Dosso highlighted that the Africa Energy Bank is nearing fruition and is expected to commence operations in the latter half of 2024.
The expectation is set for each African member country to donate at least $83 million, aiming for a collective total of approximately $1.5 billion. Founding members Afreximbank and APPO of the Africa Energy Fund (AFE) are anticipated to provide an equal amount of funding.
The remaining $2 billion is expected to be raised from alternative sources, which could include sovereign wealth funds from the Middle East.
Dosso, a member of the temporary leadership team tasked with establishing AFE, stated that six nations—Algeria, Benin, Cote d’Ivoire, Ghana, Nigeria, and South Africa—are competing to host AFE’s headquarters. Egypt has withdrawn its previous bid to host.
He mentioned, “Angola, Libya, Senegal, Venezuela, and Afreximbank, as members of the selection committee, will evaluate all applicants and present their findings before ministers make a final decision.”
