African oil-producing countries have raised 45% of the $5 billion initial funding for the planned African Energy Bank (AEB). The bank plans to finance oil projects on the African continent at a time when funding in international markets is tight.
Africa Energy Bank’s initial financial backers include the major oil producers of Nigeria, Angola and Ghana, said Omar Farouk Ibrahim, executive director of the African Petroleum Producers Organization (APPO).
“We believe we are the first development bank to go from concept to near reality in just over two years,” Ibrahim said on the sidelines of the Angola oil and gas conference, Bloomberg reported.
APPO and the African Export-Import Bank (Afreximbank) have signed an initial agreement to establish the African Energy Bank in 2022.
The new bank was initially established as an independent supranational Pan-African Energy Development Bank with capital of $5 billion.
In June this year, Afreximbank and APPO signed the founding agreement and charter of the African Energy Bank at a ceremony in Egypt. This signing ceremony concluded two years of negotiations and preparations by both parties towards the establishment of AEB.
African oil producers decided to create AEB “to address the impending funding crisis in Africa’s oil and gas industry caused by the global energy transition.”
Afreximbank said in a statement in June that “traditional lenders that Africa has relied on for decades are withdrawing support, particularly in Africa, primarily due to concerns about climate change.” Ta.
APPO Director General Ibrahim said: “For too long, Africa’s oil and gas industry has relied on funding from outside Africa. We began to take foreign funding for oil and gas projects for granted until we realized that the US had decided to abandon us.”
Ibrahim said Africa, which has the largest population living without access to energy, cannot afford to quickly transition away from fossil fuels.
Written by Charles Kennedy, Oilprice.com
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