The African Export-Import Bank (Afreximbank) and the African Petroleum Producers Organisation have taken a significant step forward by signing the establishment agreement for the Africa Energy Bank (AEB). This development comes as a pivotal response to the funding challenges facing the African oil and gas sector amid the global shift towards renewable energy.
With traditional financiers pulling back due to climate change concerns, the AEB aims to fill the looming funding gap in Africa’s energy projects. The new institution will focus primarily on oil and gas initiatives but remain open to renewable energy investments. “Africa holds over 125 billion barrels of crude oil and 600 trillion cubic feet of gas reserves, making it crucial not to abandon these resources,” stated representatives from Afreximbank. The bank is set up as an independent pan-African entity, starting with an initial capital of $5 billion.
The official signing of the AEB’s foundational documents was marked by a ceremony in Cairo, hosted by Egyptian Minister of Petroleum and Mineral Resources, Tarek El Molla. “This moment is a significant milestone in our continent’s journey towards energy independence and sustainable development,” El Molla commented at the event. The signing concludes two years of discussions and preparation following a memorandum of understanding signed in May 2022.
Prof. Benedict Oramah, President of Afreximbank, expressed the need for a delicate balance between addressing climate change and avoiding social upheaval due to economic strains in Africa. “These are challenging times that require us to weigh the imperatives of climate mitigation against the urgency of economic stability,” he remarked.
Dr. Omar Farouk Ibrahim, Secretary General of APPO, emphasized that the AEB represents Africa’s proactive approach to the financial dilemmas posed by the energy transition. “It’s crucial that Africa does not hastily abandon oil and gas, sectors vital for powering homes and industries across the continent, especially when a significant portion of the population lacks access to modern energy,” he said
This initiative not only aims to support the traditional energy sectors but also opens the door for investments in renewable energy, aligning with global energy transition trends while addressing Africa’s unique needs.
Source: ESI Africa
