In a landmark move set to reshape Africa’s energy landscape, the Africa Energy Bank is gearing up for its much-anticipated launch later this year with an impressive capital infusion of $5 billion.
Spearheaded by a collaboration between Afreximbank and the African Petroleum Producers Organization (APPO), this initiative aims to tackle the financial challenges hindering the continent’s energy sector.
According to reports from Reuters, the Africa Energy Bank emerges amidst mounting pressure on financial institutions to divest from fossil fuel projects, amplifying the urgency for sustainable energy financing solutions.
Managing director of Africa Energy Investment Corporation (AEICORP), Zakaria Dosso, announced a significant boost to the bank’s funding efforts, with Ghana recently contributing over $20 million. This move solidifies Ghana’s position as a key supporter of the initiative, following similar contributions from Nigeria and Angola last year.
Dosso underscored the necessity for Africa to bolster its financial infrastructure to drive strategic sectoral growth, emphasising the pivotal role the Africa Energy Bank will play in this endeavor.
He revealed that preparations are underway for the bank’s operational launch in the latter half of 2024, marking a crucial milestone in Africa’s energy financing landscape.
The funding model for the bank entails each African member country committing a minimum of $83 million, with Afreximbank and APPO matching this contribution as founding members of the Africa Energy Fund (AFE).
Additional funding totaling $2 billion is slated to be sourced from alternative avenues, potentially including sovereign wealth funds from the Middle East.
As anticipation builds, six African nations—Algeria, Benin, Cote d’Ivoire, Ghana, Nigeria, and South Africa—are in contention to host the headquarters of the Africa Energy Bank. Notably, Egypt has withdrawn its bid from consideration.
Dosso, a key figure in the interim leadership tasked with establishing AFE, revealed that a selection committee comprising Angola, Libya, Senegal, Venezuela, and Afreximbank will meticulously evaluate the hosting proposals.
Their recommendations will be presented to the ministers for a final decision, marking a pivotal moment in Africa’s energy financing landscape.
