Africa Energy Bank: Funding grows, but launch day still delayed

An Afreximbank delegation visited Nigeria earlier this year to assess the country’s readiness to host the Africa Energy Bank

A “large chunk” of the funds needed to get the Africa Energy Bank started has been raised, a workshop heard ahead of the African Energy Week (AEW) which kicked off today in Cape Town, South Africa.

On Monday, the African Petroleum Producers’ Organisation (APPO) and Afreximbank shared updates on the establishment of the $5 billion AEB at AEW: Invest in African Energies, aimed at addressing Africa’s persistent energy financing challenges.

Afreximbank and APPO are the Bank’s two founding institutions.

The AEB’s mandate is to provide funding for oil, gas and energy projects on the continent, reducing dependence on foreign capital, some of which have exited the oil and gas sector in recent years.

Speaking during a workshop titled Africa Energy Bank Take-Off – Bridging the Financing Gap for Africa’s Energy Sector, Omar Farouk Ibrahim, APPO Secretary-General, said the bank has made rapid strides in raising funds.

“We have succeeded in raising a large chunk of the funds we needed to get this bank started. In the last two to three years, we have achieved what no other development bank has in terms of the timeline,” Ibrahim said. 

He highlighted the continent’s energy access challenges.

“More than 600 million Africans lack electricity… yet we export 75% of our oil production and 45% of gas. If we want energy for our people, then we have to fund the projects,” said Ibrahim.

Call for a self-sufficient Africa

He emphasised that Africa must lead its own energy financing. 

“We have a duty to ensure the African continent is not left behind in terms of energy access; in doing so, we cannot continue to look to others to help us. If we get outside support, it should be to supplement what we have done.”

Haytham El Maayergi, Afreximbank Executive Vice-President, noted the continent’s current financing challenges. 

“Africa is being penalised… we pay more per kilowatt before subsidies than anywhere in the world, because the costs of financing energy projects are higher. When we borrow, we pay more because our credit ratings are not as high… It’s a toll on Africa.”

According to the workshop presentation, Africa currently receives only 4% of global climate investment, while $1.6 to $1.9 trillion will be required by 2030 to transition away from fossil fuels. 

The annual energy finance gap is estimated at $31billion to $50 billion, and fossil fuels still account for 35% to 82% of government revenues in some countries, making closing these gaps critical to achieving energy access and supporting development.

Africa Energy Bank to be located in Abuja

An Afreximbank delegation visited Nigeria earlier this year to assess the country’s readiness for the AEB after Abuja was selected as host city.

The AEB’s opening has been postponed twice so far – it was initially to have opened its doors in September 2024 and then on 28 January this year.

A new launch date of sometime in Q2 2025 had also previously been mooted, but no updates on when the AEB would officially open its doors were announced at the Monday meeting. 

Cover photo:   Haytham El Maayergi, Executive Vice President of Afreximbank, addresses an AEW workshop in Cape Town on Monday. Source: Real_AEW/X