Seven African Countries Compete to Host New Energy Bank

by Motoni Olodun

Ghana, Egypt, Nigeria, Benin, South Africa, Ivory Coast, and Algeria have all expressed interest in hosting the African Energy Bank, a proposed financial institution to fund oil and gas projects in the continent. The bank is expected to be established later this year or early next year.

The African Petroleum Producers Organization (APPO), a continental body of 18 oil-producing countries, initiated the idea for the bank last year. The APPO aims to create a platform for cooperation and harmonization of efforts among African oil producers, especially as international banks cut financing for fossil fuel projects due to the global energy transition.

Dr. Omar Farouk Ibrahim, Secretary General of APPO, visited Ghana in September 2023 to meet with President Akufo-Addo and officials of the Ministry of Energy. He said the president made a strong case for Ghana, citing its political stability, economic growth, and strategic location. He also revealed that he was shown a building in Accra that could host the bank.

Dr. Farouk Ibrahim said Egypt had also invited them for a visit to inspect a building they believe can host the bank. He added that the criterion for choosing the host country is that at least two countries should ratify their laws to support the establishment of the bank.

The African Energy Bank is expected to operate similarly to the Africa Energy Investment Corporation, a development finance institution created by APPO to channel resources towards the development of Africa’s energy sector. The bank will primarily focus on funding oil and gas projects on the continent, reducing dependence on external financing sources that may have limitations or conditions.

The bank is also seen as a way to support the energy transition in Africa by enabling oil and gas producers to invest in low-carbon technologies and diversify their energy mix. Some oil and gas companies in Africa have already taken steps to reduce their emissions and participate in renewable energy projects. For example, CNOOC signed an agreement with Shell in June 2020 to supply China’s first imports of carbon-neutral liquefied natural gas carg

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