African Energy Bank Launched in Landmark Agreement

In a momentous occasion, the African Export-Import Bank (Afreximbank) and the Africa Petroleum Producers’ Organisation (APPO) have joined forces to establish the Africa Energy Bank (AEB), marking a significant milestone in Africa’s energy sector. The signing ceremony, held at the Ministry of Petroleum and Mineral Resources of the Arab Republic of Egypt, was presided over by H.E. Eng. Tarek El Molla, Egyptian Minister of Petroleum and Mineral Resources.

The historic event witnessed the signing of the Establishment Agreement and the Charter of the Africa Energy Bank by Prof. Benedict Oramah, President and Chairman of the Board of Directors at Afreximbank, and Dr. Omar Farouk Ibrahim, Secretary General of APPO.

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The creation of the AEB follows two years of meticulous negotiations and preparations, initiated by a Memorandum of Understanding signed in May 2022. The Bank’s establishment is a response to the imminent funding crisis facing the African oil and gas industry, exacerbated by the global energy transition. Traditional financiers, citing climate change concerns, are withdrawing their support, leaving a void in Africa’s energy financing landscape.

H.E. Eng. Tarek El Molla, a Member of the APPO Ministerial Council, hailed the establishment of the Africa Energy Bank as a significant milestone in Africa’s quest for energy independence and sustainable development. He emphasised the collaborative efforts of Afreximbank and APPO in paving the way for a brighter future for all Africans.

Prof. Benedict Oramah remarked on the historic significance of the event, highlighting the challenges faced by Africa in balancing climate change mitigation with economic development imperatives. He expressed Afreximbank’s pride in co-investing in the AEB and leading the management and implementation process.

Dr. Omar Farouk Ibrahim underscored the critical role of the AEB in addressing the funding challenge posed by the global energy transition. He emphasised Africa’s dependence on external financing for its oil and gas projects and stressed the continent’s inability to abandon these energy sources hastily, given its energy poverty.

The primary objective of the AEB is to fill the funding gap left by the withdrawal of traditional financiers from Africa’s oil and gas projects. With abundant reserves of crude oil and gas, Africa cannot afford to overlook these resources in its pursuit of modern energy access for its population.

While the AEB’s focus remains on funding oil and gas projects, it remains open to renewable energy initiatives, reflecting Africa’s commitment to a diversified energy portfolio. The Bank has been structured as an independent and supranational pan-African energy development bank, with an initial capital of USD 5 billion.

With the signing of the Establishment Documents, the Africa Energy Bank is poised to embark on its mission to drive Africa’s energy transformation, with at least two Member Countries required to sign and ratify the Establishment Documents for the Bank to officially launch.

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Source: Afreximbank