The Africa Energy Bank is set to launch in the first quarter of 2025, despite not having the full $5 billion funding initially required for its establishment. Omar Farouk, Secretary-General of the African Petroleum Producers’ Organization, addressed this initiative at the Practical Nigerian Content Forum in Yenagoa, Bayelsa State. He affirmed that the bank would not postpone its operations until the entire funding is secured, emphasizing the importance of starting ahead of schedule to demonstrate commitment to the continent’s energy needs. Notably, this funding will not come from Western governments focused on energy transition, highlighting a shift towards self-reliance in energy financing within Africa.
The setup of the Africa Energy Bank has proceeded remarkably quickly, with Farouk recalling that initial doubts about its feasibility stemmed from perceptions of Africa’s poverty and dependency. However, in just two years, all necessary studies and negotiations were completed, and the founding member countries ratified the establishment documents, with Ghana and Nigeria being the first to sign. The selection of Abuja as the headquarters was competitive, with Nigeria ultimately chosen after a comprehensive evaluation of the four shortlisted countries. The rapid development of the bank underscores a new narrative for Africa, showcasing its determination to control its energy destiny.
To facilitate the operational aspects of the bank, PricewaterhouseCoopers (PwC) has been contracted to assist in project management and initial staff hiring recommendations. As Farouk noted, the decision on hiring will remain with the bank’s management, ensuring that strategic human resources decisions align with the organization’s goals. This collaboration with PwC represents a calculated approach towards ensuring proper governance and effective administrative frameworks as the Africa Energy Bank prepares to operationalize its mandate.
Despite only needing $500 million to initiate operations, Farouk disclosed that approximately 50% of the total $5 billion funding goal has already been raised. He believes that early capital would be enough to establish a basic operational framework that could attract further investment from member countries. This proactive fundraising signifies a shift in approach for Africa, showcasing a willingness to take charge and manage its resources effectively. The Secretary-General expressed hope that Nigeria would support the establishment of the bank by providing a suitable physical location for its headquarters, indicating the necessity of immediate tangible support for the project’s success.
The bank’s structural organization will feature three classes of shareholders. Class A will include the African Petroleum Producers’ Organization member countries, Class B will cater to other non-member African nations, and Class C will open up to international investors. However, Farouk emphasized the importance of aligning the bank’s objectives with its investors, expressing hesitation towards funding from entities committed to energy transition, which the bank does not want to compromise its goals. This caution indicates a strategic positioning aimed at ensuring that the bank retains control over its mission and financing paths.
Heineken Lokpobiri, the Minister of State for Petroleum Resources, reinforced the bank’s ambition to grow its capital significantly, projecting a growth to $120 billion by 2028. This growth will depend heavily on the establishment of local capacity and content, ensuring that Africa can continue to develop its energy solutions sustainably. Lokpobiri’s statements reflect an understanding that for the bank to achieve its goals and effectively address the continent’s energy challenges, a strong local workforce and indigenous capabilities must be prioritized. The Africa Energy Bank is thus poised to become a prominent player in the region’s energy landscape, driven by local determination and resource management.
