- The Africa Energy Bank has begun operations with $5bn in authorised capital, four years after APPO ministers approved its creation.
- Energy experts welcomed the institution but said it must attract more public and private investment to address Africa’s estimated $200bn energy funding gap.
Energy experts have welcomed the launch of the $5bn Africa Energy Bank (AEB). However, they say the institution needs more capital to address Africa’s estimated $200bn energy investment gap.
They urged African governments and private investors to mobilise additional funding. Greater capital mobilisation, they said, would expand the bank’s reach across the continent’s energy sector.
The African Export-Import Bank (Afreximbank) and the African Petroleum Producers’ Organisation (APPO) announced the bank’s launch in Abuja on Saturday.
The institution has appointed Egyptian banker Helmy Ghazi as its pioneer president. It begins operations four years after African petroleum ministers first approved its creation.
The launch marks a step towards building an African financing institution for the continent’s energy sector. Its backers expect the bank to fund infrastructure, strengthen energy security and support industrial growth.
Experts Welcome Bank but Call for More Capital
Dr Muda Yusuf, chief executive of the Centre for the Promotion of Private Enterprise (CPPE), said the bank could support the growth of Nigeria’s energy industry.
He noted that the sector offers significant investment returns. Yusuf also called for support for the institution, citing Western development and financial institutions’ decisions to withdraw from fossil-fuel financing.
Oil and gas sustainability expert Meka Olowola also welcomed the initiative. However, he cautioned against expecting the bank to close Africa’s energy financing gap alone.
Olowola described the establishment of the bank as a strong start. He said he expected the institution to convert its capital into well-prepared, bankable projects.
Its wider impact, however, would depend on its ability to attract funding from governments and private investors, he added.
Olowola, founder of Zenera Consulting and a director of FuelTree Limited, said: “We in the industry love the initiative because it is likely to act as a catalyst for much larger investments.”
FuelTree Limited is responsible for implementing Nigeria’s National LPG Cylinder Recirculation Programme.
The bank’s promoters estimate Africa’s energy investment needs at about $200bn. They expect the AEB to help address the shortfall as traditional financiers reduce their exposure to fossil-fuel projects.
Africa Energy Bank to Finance Energy Infrastructure
The AEB emerged amid growing concerns about international lenders’ retreat from oil and gas financing.
Banks, development finance institutions and asset managers had scaled back support for fossil-fuel projects under climate-related pressure. African producers argued that the trend could limit resource development and infrastructure investment.
The bank’s mandate covers oil and gas projects and a broader energy transition. Its backers say African countries should retain greater control over financing and developing their energy resources.
The institution will finance projects across the energy value chain. These include oil and gas production, refining, storage and distribution.
It will also support power generation and transmission infrastructure. Emerging technologies, including artificial intelligence, also fall within its expected areas of support.
The bank’s promoters say reliable energy supply will remain important as African countries pursue industrial growth and economic transformation.
How the Africa Energy Bank Was Established
APPO ministers approved the initiative in May 2022. They adopted a resolution at a meeting in Luanda, Angola, directing APPO and the Africa Energy Investment Corporation to establish the bank.
The decision followed concerns that African countries needed a dedicated institution to finance hydrocarbon projects and wider energy development.
Afreximbank later joined the initiative as a strategic partner. In June 2024, both institutions signed the Establishment Agreement and Charter.
The agreement created the bank’s legal and institutional framework. It also prepared the ground for mobilising shareholder commitments.
The Abuja launch followed about four years and five months after the initial ministerial resolution. Establishing the supranational lender required capital commitments, governance arrangements and operational processes.
AEB Has $5bn in Authorised Capital
The AEB operates as an independent, supranational, pan-African financial institution. It has $5bn in authorised capital.
The bank expects to attract funding from African governments, national oil companies and commercial banks. Development finance institutions and private investors will also provide potential sources of capital.
Afreximbank had earlier approved a $1.7bn investment in the institution. The commitment makes it one of the bank’s major backers.
APPO has 18 member countries, all of which produce oil, gas or both.
Helmy Ghazi Appointed Pioneer President
Ghazi previously served as deputy chief executive and managing director, Head of Global Banking, at HSBC Bank Egypt.
He has more than 25 years of banking experience. His work has covered customer growth, team development, risk management and international markets.
As pioneer president, Ghazi will lead the bank’s operational development. His priorities include strengthening governance and investment frameworks.
He will also work to attract additional capital and begin financing viable energy projects across Africa.
What the Bank Means for Africa
The AEB gives African oil- and gas-producing countries a dedicated platform for financing energy projects. Its launch comes as conventional energy financing becomes more difficult to secure.
Nigeria hosted the bank’s inaugural General Assembly in Abuja. The development also reinforces the country’s role in continental energy policy and finance.
If the bank attracts substantial additional funding, it could support investment in petroleum and power infrastructure. It could also reduce reliance on foreign lenders and give African countries greater influence over their energy development.
However, the institution’s long-term impact will depend on its ability to mobilise capital beyond its initial $5bn authorisation. As Olowola noted, attracting larger pools of public and private investment will be central to its success.