African oil-producing nations are set to launch a $5 billion energy bank in Abuja next year, having already secured 45% of the necessary startup capital.
The initiative aims to fill the funding gap created by traditional investors who are increasingly shifting their focus from crude oil to low-carbon energy solutions.
This was disclosed by the Secretary General of the African Petroleum Producers Organization, Omar Farouk Ibrahim,
during the Angola Oil & Gas conference held in Luanda, Angola’s capital, according to Nairametrics.
Ibrahim noted that countries such as Angola, Nigeria, and Ghana are among the initial supporters of this venture.
He emphasized that the funds have been raised even before the bank’s legal establishment, showcasing strong regional commitment to the project.
He said, “We have come a long way. I believe we are the first development bank to progress from conceptualization to near fruition in just over two years.”
The African Export–Import Bank, the primary financier of the initiative, signed a memorandum of understanding with the African Petroleum Producers Organization in June to establish the energy bank.
As global efforts increasingly focus on funding clean energy to achieve net-zero greenhouse gas emissions, countries like Angola and the Democratic Republic of Congo may encounter difficulties in securing financing for oil projects in international capital markets.
The commitment from oil-producing nations in Africa to advance the energy bank, aimed at developing more oil production fields in the region, stands in contrast to resolutions made at the recent Africa Climate Summit in Kenya, which called for increased taxes on carbon emitters.
Last year, a senior official from the African Finance Corporation (AFC) confirmed that the organization would continue investing in fossil fuels, despite climate change warnings from major development institutions.
In an interview with Reuters, the Executive Director of Financial Services at AFC, Sanjeev Gupta, stated that the corporation would not shy away from fossil fuel investments, emphasizing the continent’s significant development needs.
The Afrexim Bank has warned that divesting from fossil fuels could result in a reduction of up to $30 billion in Nigeria’s Gross Domestic Product.
