KEY POINTS
- The Africa Energy Bank will launch by mid-2025 with $5 billion in funding.
- South Africa has shown interest in joining, despite not being an APPO member.
- The bank will help finance oil and gas projects as global investors shift away.
The Africa Energy Bank, a new institution designed to fund oil and gas projects across the continent, is expected to begin operations by mid-2025.
The bank, a partnership between Afreximbank and the African Petroleum Producers Organization (APPO), seeks to close a financing gap created by increasing pressure on major banks to shift investments away from fossil fuels.
Denys Denya, Afreximbank’s senior executive vice president, confirmed that the bank is in the capital-raising phase, with several African nations already contributing.
“We are in discussions with more countries to secure additional funding,” Denya said during Africa’s annual Mining Indaba in Cape Town. “We expect trading to start before mid-year.”
Headquartered in Nigeria, the bank plans to launch its operations with up to $5 billion in initial funding to deliver financing solutions that advance energy development throughout Africa.
South Africa considers joining the energy bank
Several African nations, including Angola, Egypt, Nigeria, and Ghana, have committed to joining the initiative. South Africa, although not a member of APPO, has also expressed interest in participating.
Jacob Mbele, director general of South Africa’s Department of Mineral Resources, confirmed that the country had requested the bank’s prospectus to evaluate potential funding commitments.
With the energy transition shifting global investment priorities, Africa’s leaders are looking for alternatives to ensure continued development of oil and gas projects.
The Africa Energy Bank functions to support resource-rich nations keep their economic growth patterns active as they adapt to shifting energy markets.
Funding and regulatory considerations
Renewable energy initiatives have become a primary focus for World Bank and other global institutions, thereby creating difficulties for African oil and gas projects to acquire financing capital.
The Africa Energy Bank exists to offer funding opportunities designed specifically for African energy requirements.
According to Reuters, Afreximbank has yet to disclose the full list of financial commitments, but Denya assured stakeholders that the bank has received strong backing.
“We are confident that this initiative will reshape energy financing in Africa,” he said.
The bank’s establishment comes amid ongoing debates about Africa’s energy future. While renewable energy projects continue to gain traction, oil and gas remain critical for economic stability in many African nations. The new institution is expected to play a crucial role in balancing development and sustainability.
