The proposed Africa Energy Bank which will help in funding oil and gas projects across Africa is set to begin operations this year with an initial capital base of $5 billion according to reports from Reuters.
The bank is a joint initiative between Afreximbank and the African Petroleum Producers Organization (APPO), established to counteract the financial deficiency in Africa’s energy sector, particularly as major banks face increased pressure from environmental groups to reallocate investments from fossil fuel projects that affect the climate.
Zakaria Dosso, the managing director of Africa Energy Investment Corporation (AEICORP), announced that Ghana recently deposited just over $20 million to AEICORP, marking its position as the third African nation to contribute, following Nigeria and Angola. Both nations had each contributed $10 million last year to support the bank’s funding.
The expectation is set for each African member country to donate at least $83 million, aiming for a collective total of approximately $1.5 billion. Founding members Afreximbank and APPO of the Africa Energy Fund (AFE) are anticipated to provide an equal amount of funding.
The remaining $2 billion is expected to be raised from alternative sources, which could include sovereign wealth funds from the Middle East.
Dosso, a member of the temporary leadership team responsible for establishing AFE, mentioned that six nations Algeria, Benin, Cote d’Ivoire, Ghana, Nigeria, and South Africa — are vying to become the location for AFE’s headquarters. Egypt has withdrawn its earlier bid to host.