The Africa Energy Bank has been formally established by the African Export-Import Bank (Afreximbank) and the African Petroleum Producers’ Organisation (APPO), with authorised capital of $5 billion.
Ghana was one of the first three countries to pay its capital contribution, alongside Nigeria and Angola, according to APPO Secretary General Omar Farouk Ibrahim last year.
The three payments represented 44 per cent of the minimum number of APPO member states required to establish the bank. The value of Ghana’s contribution has not been disclosed.
The new institution is intended to fund projects throughout the energy chain, including exploration, production, refining and distribution.
Its creation comes as traditional lenders reduce their exposure to fossil-fuel projects, despite oil and gas continuing to play a central role in Africa’s energy systems. The bank’s announcement estimated that the continent requires $200 billion in energy investment.
Afreximbank said the Africa Energy Bank held its first general meeting in Abuja, Nigeria, where Helmy Ghazi was appointed as its first president. The meeting also resulted in the formation of the bank’s first board of directors.
The bank is targeting an asset base of $120 billion, Reuters reported earlier. South Africa has expressed interest in joining, although it is not a member of APPO.
Ghana’s financing discussions with Afreximbank
Ghana resolved all outstanding issues relating to a $750 million facility with Afreximbank in December.
The country also sought long-term financing from the bank for its minerals sector in February, highlighting the wider financing relationship between Ghana and the institution behind the new energy bank.
The payments made by Ghana, Nigeria and Angola helped meet the initial requirement for the bank to begin operations. Their combined contributions accounted for nearly half of the minimum participation required from APPO members, with the precise amount paid by Ghana still undisclosed.
The Africa Energy Bank will focus on financing energy projects from the earliest stages of exploration and production through to processing and distribution. Its stated purpose is to provide funding at a time when established lenders are withdrawing from fossil-fuel investment, while African economies remain heavily dependent on oil and gas for their energy systems.
Afreximbank and APPO have therefore positioned the new bank as a source of capital for the continent’s energy sector, with the institution now formally organised under its first president and board.
