The African Petroleum Producers’ Organization (APPO) is working towards establishing the Africa Energy Bank (AEB) to provide an alternative funding source for oil and gas projects in Africa. This initiative comes in response to international financing institutions scaling back their funding for such projects due to stringent conditions and environmental concerns.
Omar Farouk Ibrahim, the Secretary General of APPO, emphasized the challenge posed by the drying investment in hydrocarbons and highlighted the need for Africa to take control of its own energy future.
The AEB aims to attract investment from countries like Saudi Arabia, the United Arab Emirates, Qatar, and Kuwait, while addressing the funding challenges caused by the global shift towards renewable energy.
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Key objective
African nations that are members of APPO will collaborate with the African Export-Import Bank (Afreximbank), a pan-African multilateral trade finance institution, to launch the energy bank by the end of 2023.
The key objective of the Africa Energy Bank is to provide financing for oil and gas operations in Africa, reducing dependence on external financing sources such as the World Bank, which may have limitations. Farouk highlighted that the bank will primarily focus on funding oil and gas projects on the African continent due to the scarcity of funds. The bank’s shareholding will be open to all African oil companies, their national companies, and other investors. However, participation will be limited to those who share the bank’s vision and do not represent sovereigns or investors from outside of Africa.
Overall, the establishment of the Africa Energy Bank aims to support the financing of oil and gas projects in Africa while ensuring a shared vision among its stakeholders and reducing reliance on external sources of funding.
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