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The committee tasked by the African Petroleum Producers Organization (APPO) with selecting a headquarters for the African Energy Bank intends to visit Ghana and Nigeria. African Energy Bank will launch by June 30 after selecting a host nation this month and hopes to raise an initial USD 5 billion from African signatories, international financiers, and Middle Eastern states.
The committee held its third meeting, headed by the Libyan Minister of Oil and Gas, Mohamed Oun, in his capacity as chairman of the committee, via a closed session, in the presence of all members of the committee and the Secretary General of APPO. The Libyan Ministry of Oil and Gas stated that the meeting saw an agreement to contact both Ghana and Nigeria regarding coordinating a visit to the headquarters proposed by them to host the African Energy Bank, to match the criteria and principles set by the committee for choosing the host country.
Formed out of a partnership between the African Petroleum Producers Organization (APPO), which represents the continent’s petrostates, and the African Export-Import Bank (Afreximbank), the institution hopes to fund oil and gas projects on the continent amid a damaging financing squeeze in recent years. APPO wants to establish an energy bank to confront the challenges facing African countries in extracting oil wealth, and in benefiting from it in the transition to producing renewable energies, in addition to supporting oil industry projects, and the general development of African member states.
Six member states including Ghana jostled for host status of the newly formed African Energy Bank. Matthew Opuko Prempeh, Ghana’s energy minister, stated that Ghana was one of the only countries that fulfilled all the criteria, adding that site visits had already taken place.
Nigeria and Angola had so far supplied initial funds to the project, at around USD 20 million each. The bank is seeking USD 83 million from each of the 18 signatories, amounting to almost USD 1.5 billion. Once set up, the bank will be able to fund oil and gas projects in Africa, despite Western financing drying up in recent years due to the global shift away from fossil fuels.
The whole idea of establishing the African Energy Bank stems from the realization that those on whom Africa has been depending for the last 70-100 years for finance to explore, produce, and process its oil and gas have been essentially Western and they have decided as a result of the global paradigm shift towards renewables to end fossil fuel funding, particularly in Africa.
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Africa should now shift away from exporting oil and gas to wealthy nations in Europe and elsewhere and towards domestic consumption. Many African producers, including Nigeria, Angola, and Ghana, export their oil and import refined products, hitting foreign exchange, slowing industrialization, and leaving them vulnerable to price volatility, says Dr Omar Farouk Ibrahim, a former OPEC Governor from Nigeria.
