Establishment Of Africa’s Energy Bank Begins

Yemisi Izuora

Practical steps towards establishing an energy bank to fund oil and gas businesses in Africa has been initiated between the African Export-Import Bank (Afreximbank) and the African Petroleum Producers Organisation (APPO).

Both parties endorsed a deal for the creation of the bank at the 8th African Petroleum Congress and Exhibition tagged “CAPE VIII” in Luanda, Angola.

The deal was aimed at scaling up private sector investment in African oil and gas projects.

The bank when established would provide critical financing for new and existing oil and gas projects as well as energy developments across the entire value chain.

While the Director and Global Head, Client Relations, Afreximbank, Mr. Rene Awambeng signed on behalf of the bank, Nigeria’s Omar Farouk, Secretary General of APPO, signed on behalf of African oil producers.

According a communiqué released after the deal, both parties stated that the deal was made possible having regard to the long, mutually beneficial relationship and cooperation between APPO and Afreximbank.

The parties were concerned about the threat posed to the African oil and gas industry and Africa’s economic development by the coordinated withdrawal of international trade and project financing from Africa’s oil and gas industry.

According to them, having acknowledged the impact of climate change on Africa and aware that poverty fosters accelerated environmental degradation, there was the need for an orderly and just transition that protects the environment and enhances living standards.

“The two African institutions have resolved to work together to find an Africa-led solution to the threat posed to the African oil and gas industry and an orderly energy transition in Africa by the withdrawal of funding by its traditional financiers.

“The two institutions have committed to taking necessary actions to promote a sustainable and balanced solution to the challenge of financing the oil and gas industry in Africa during the energy transition.

“This will be done through, among others, the establishment of an African energy transition bank dedicated to supporting an Africa-led energy transition strategy that is consistent with the goal of preserving the environment and livelihoods,” they said.

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