The African Energy Bank (AEB), a newly established financial institution, aims to address Africa’s energy needs while considering the future.
The African Energy Chamber (AEC), a key player in the African energy sector, applauded the bank’s creation. They praised the African Petroleum Producers’ Organisation (APPO) and Afreximbank for their swift action in setting up the AEB.
The bank is seeking contributions from its founders. APPO’s 18 signatories are expected to contribute nearly $1.5 billion, with Afreximbank committing $1.25 billion. The initial capital of $5 billion is projected to grow to over $120 billion in seven years.
The AEC believes the AEB will be a game-changer for Africa’s energy sector. They point out that while oil and gas are still important, the global shift towards renewable energy has created a funding gap. Africa faces a significant energy crisis, with millions lacking access to electricity and clean cooking solutions.
“This is happening amidst a rapid decline in fossil fuel funding, while IOCs divest their oil and gas assets, favouring more strategic investments,” the AEC said. They emphasize that the International Energy Agency estimates Africa needs $25 billion annually until 2030 to achieve modern energy access for the entire continent. The AEB aims to bridge this gap by providing financing for African energy projects.
The bank is already generating interest. APPO’s Secretary General, Omar Ibrahim, announced that member states have begun contributing funds. The AEC’s Executive Chairman, NJ Ayuk, sees the AEB as a way for African countries to lessen their dependence on foreign capital while gaining access to new financing sources.
