The African Petroleum Producers Organisation (APPO) has asked oil-producing African member countries to contribute their $83m subscription fees, and so help establish the Africa Energy Bank (AEB), scheduled to be launched in Nigeria in September 2024.
In collaboration with the African Export-Import Bank, APPO established the AEB, which aims to have an initial capitalisation of $5bn to offer private sector funding for energy development projects related to oil, gas and renewable energy across Africa.
According to a press release, the AEB plans to collaborate with more than 700 African banks to create a profitable path for the continent's energy sector.
However, it seems as if there could be funding issues for the financial institution, which prompted Omar Farouk Ibrahim, APPO’s secretary-general, to call on members to pay their fees.
APPO was created in January 1987 in Nigeria to serve as a platform for the harmonisation of efforts, collaboration, and sharing of knowledge and skills among African oil-producing countries.
African energy projects typically rely on development finance institutions and multilateral development banks, which have recently limited funding for fossil fuel projects due to climate change concerns.
Instead of relying solely on international banks, the AEB can potentially capitalise on the region's natural resources such as oil, gas and green hydrogen projects by directing pension funds into African projects.
"APPO has always been at the forefront of championing energy initiatives in Africa by ensuring access to necessary financing and providing its business expertise," said Sandra Jeque, event and project director at Energy Capital & Power, an Africa-focused investment platform.
She added: "Dr Ibrahim's presence reaffirms the organisation's commitment to making the MSGBC region the new frontier for oil and gas developments."
The MSGBC Basin derives its name from the initials of the countries where the basin, or a group of smaller sub-basins, is located: Mauritania, Senegal, Gambia, Guinea-Bissau and Guinea-Conakry.
Nigeria is set to host the newly established AEB, beating off competition from three other countries.
Nigeria's efforts to secure the hosting rights picked up pace in late May, when the nation officially approved the bank's charter and President Bola Tinubu authorised a $100m investment, exceeding the mandatory $83.33m for member states, as reported by Reuters.
