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Establishment of Africa Energy Bank: A Milestone in Pan-African Energy Development
The Africa Petroleum Producers' Organization (APPO) and the African Export-Import Bank (Afreximbank) have recently achieved a significant milestone by signing the Establishment Agreement and Charter for the Africa Energy Bank (AEB). The historic ceremony took place at the Ministry of Petroleum and Mineral Resources in Egypt.
Hosted by Tarek El Molla, the Egyptian Minister of Petroleum and Mineral Resources, the event saw Benedict Oramah, President of Afreximbank, and Omar Farouk Ibrahim, Secretary General of APPO, formalize the agreement on behalf of their organizations.
The AEB is envisioned as an independent, pan-African energy development bank, launching with a starting capital of $5 billion. This development marks the culmination of two years of negotiations following a Memorandum of Understanding signed in May 2022, aimed at establishing the AEB to tackle the financing gaps in Africa's oil and gas sectors, exacerbated by the global shift towards renewable energy.
El Molla, who also serves on the APPO Ministerial Council, expressed pride in this pivotal moment, highlighting it as a step towards Africa's energy sovereignty and sustainable progress. The joint efforts of Afreximbank and APPO underline their dedication to enhancing Africa's energy security and developmental aspirations.
Prof. Benedict Oramah commented on the significance of the day, noting the balance needed between addressing climate change and the continent's economic challenges. He is proud of Afreximbank's role in co-founding and steering the AEB, which is set for operational launch in July.
Oramah acknowledged the strong support from APPO members and leadership, reaffirming their commitment to meeting the continent’s urgent needs.
Farouk emphasized that the AEB is Africa’s answer to the funding challenges arising from the global shift away from fossil fuels. He pointed out that the reliance on non-African funding for the continent's oil and gas industries needs reevaluation in light of these changes.
He argued for the necessity of maintaining oil and gas production in Africa, especially as a significant portion of the population still lacks reliable energy access.
Farouk also praised Professor Oramah's leadership, noting that the concept of the AEB was first discussed in Cairo in December 2020 during a meeting hosted by El Molla.
The AEB will focus on financing oil and gas projects but will also consider renewable energy initiatives, aiming to alleviate energy poverty across Africa. While initiated by African institutions, the AEB welcomes investment from global partners who support its goals.
With the foundational documents now signed, the bank’s official launch awaits the ratification by at least two member countries.