$5bn Africa Energy Bank takes shape as Nigeria, others make capital contributions

More APPO countries to pay $83m each   The proposed Africa Energy Bank (AEB) is gaining momentum following capital commitments from Nigeria, Angola and Ghana. In what was described as a significant development for Africa’s energy sector, the three countries recently fulfilled their capital commitments towards establishing the bank. The three countries’ capital injections represent […]

• More APPO countries to pay $83m each

 

The proposed Africa Energy Bank (AEB) is gaining momentum following capital commitments from Nigeria, Angola and Ghana.

In what was described as a significant development for Africa’s energy sector, the three countries recently fulfilled their capital commitments towards establishing the bank.

The three countries’ capital injections represent 44% of the minimum required funding from African Petroleum Producers Organisation (APPO) members to initiate the bank’s operations.

Dr  Omar Farouk Ibrahim, Secretary General of APPO, announced the progress during the Congo Energy & Investment Forum last week, according to a statement seen yesterday.

Daily Trust reports that the AEB aims to finance oil and gas projects across the continent, addressing funding challenges posed by traditional Western financial institutions’ reluctance to support fossil fuel initiatives due to environmental concerns.

APPO has requested each of its 18 member states to contribute $83 million, targeting a total initial capitalisation of $5 billion.

Beyond Nigeria, Angola and Ghana, five additional member states – Algeria, Benin, the Republic of Congo, Equatorial Guinea and Ivory Coast – have pledged to make their payments, aligning with the bank’s goal to commence operations in the first half of 2025.

Daily Trust reports that Nigeria, which is sub-Saharan Africa’s largest oil producer, is bidding to host the headquarters of the bank in Abuja, the Federal Capital Territory.

Recently, the Minister of Petroleum Resources (Oil), Heineken Lokpobiri, appealed to the members to vote for Nigeria as the headquarters of the financial institution during the bidding rounds in Abuja.

Lokpobiri said Nigeria is the leading country when it comes to the oil and gas sector, with an oil reserve of over 37 billion barrels.

“Whether you are producing 1,000 barrels a day or 1.5 million barrels a day, you have only one vote. This is why all APPO members are very important,” he said.

Nigeria offers significant opportunities in the oil and gas sector, including a 2025 bid round. The implementation of the Petroleum Industry Act has introduced regulatory reforms to enhance transparency and attract investment, driving major projects forward.

Recent final investment decisions (FIDs) include TotalEnergies’ $550 million Ubeta Gas Field Development and Shell’s $5 billion Bonga North Project, yet additional financing is crucial to advancing Nigeria’s gas agenda and unlocking its full potential in the energy transition.

Similarly, Angola is actively diversifying its energy portfolio while advancing major deepwater developments, including TotalEnergies’ $6 billion Kaminho Deepwater Project, Eni’s Agogo Integrated West Hub and a limited public tender, with a long-term goal of increasing production to 2 million barrels per day.

Amid these developments, the establishment of the AEB is a strategic response to Africa’s need for dedicated financial institutions that understand the continent’s unique energy landscape.

By providing tailored financing solutions, the bank is poised to accelerate energy project development, enhance energy security and drive economic growth. As more countries contribute their capital shares, the bank is expected to play a pivotal role in unlocking investment, bridging financing gaps and ensuring sustainable energy expansion across Africa.