The African Export-Import Bank (Afreximbank) and the African Petroleum Producers’ Organization (APPO) have formally launched the Africa Energy Bank (AEB), establishing a new pan-African financial institution aimed at mobilising investment for the continent’s energy sector amid estimated financing needs of $200bn.
The launch was announced during the bank’s inaugural general meeting in Abuja, Nigeria, marking a step towards strengthening Africa’s capacity to finance energy projects and secure supplies from diverse sources.
The establishment of the institution comes as African governments seek greater control over financing decisions shaping the continent’s energy future, particularly as traditional sources of funding for energy projects become increasingly constrained.
Expanding energy production, transportation and processing infrastructure is also critical to supporting industrial growth and meeting rising demand from emerging sectors, including technology and artificial intelligence.
According to a joint statement by Afreximbank and APPO, the African Energy Bank will seek to address the continent’s substantial investment gap by providing financing mechanisms tailored to the needs of African energy projects.
$200bn energy investment gap
The bank begins operations against an estimated $200bn in investment requirements across Africa’s energy sector, as traditional lenders increasingly scale back financing for projects involving fossil fuels.
The two institutions said several conventional sources of energy financing had reduced their exposure to fossil fuel projects, despite the continued importance of oil and natural gas to the economies and energy systems of many African countries.
The new institution is intended to bridge this financing gap while supporting a just energy transition that reflects the continent’s development priorities and individual countries’ circumstances.
Its mandate seeks to address the challenge of balancing the expansion of cleaner energy sources with the need to maintain reliable supplies of conventional energy to support economic activity and industrial development.
$5bn authorised capital to support energy value chain
The AEB has an authorised capital of $5bn and is mandated to finance projects across the entire energy value chain, spanning exploration and production, transportation, processing, refining and distribution.
Its investments are expected to strengthen domestic production capacity, reduce African countries’ dependence on imported petroleum products and support intra-African trade in energy commodities and related products.
Refining and processing are among the key priorities, as expanding these activities could enable African countries to capture more value from their natural resources rather than relying primarily on exporting raw materials and importing finished products.
The approach is also intended to support the development of a more competitive industrial base while increasing the economic benefits generated by the continent’s energy resources.
The bank’s mandate further seeks to strengthen African participation in the energy sector, giving the continent a greater role in shaping investment priorities, managing projects and developing production capabilities.
Independent institution to mobilise public and private investment
The new bank will operate as an independent, supranational African financial institution, seeking to attract capital from governments, national oil companies, financial institutions and private-sector investors.
The model is designed to diversify funding sources and build a broad investor base capable of financing strategic energy projects across the continent.
By mobilising domestic, African and international capital, the institution aims to channel investment towards projects that strengthen energy security, improve supply-chain efficiency and promote economic integration among African countries.
Helmi Ghazi appointed first president
The inaugural general meeting also approved key institutional appointments, including the selection of Helmi Ghazi as the bank’s first president and the formation of its inaugural board of directors.
The board brings together representatives from the public and private sectors, alongside leading institutions involved in economic and development policy across the continent.
The appointments mark an important step towards completing the bank’s institutional structure and beginning the implementation of its mandate to support investment and expand Africa’s energy capacity.
Afreximbank’s financial capacity
Afreximbank is a pan-African multilateral financial institution mandated to finance and promote African trade, including trade between countries on the continent and with international markets.
The bank plays a central role in supporting trade finance and mobilising capital for projects aimed at strengthening Africa’s economic integration and development. Its total assets and liabilities exceed $54bn, according to the information provided by the institutions.
