The African Petroleum Producers’ Organization (APPO) is putting the finishing touches on plans to establish the Africa Energy Bank.
The bank is being set up to finance oil and gas operations in Africa in order to curb external financing which typically has its limitations.
African nations that are members of the Petroleum Producers’ Organization will collaborate with the African Export-Import Bank to launch an energy bank by the year’s end, according to Dr. Omar Farouk Ibrahim, the APPO general secretary.
The secretary-general stated in a goodwill message delivered at the sixth edition of the Nigeria International Energy Summit (NIES) held recently in Abuja, Nigeria, that the process of creating the bank, and cooperation between APPO and Afreximbank, had reached an advanced level. He also stated that a decision on the site of its headquarters and a launch date will be made soon.
Dr. Omar Farouk Ibrahim, “This is going to focus essentially on funding oil and gas projects on the African continent because the funds have dried.”
He also noted that the World Bank, and other international financing institutions that typically finance oil and gas projects in Africa are shutting down their financing channels in addition to having“stringent conditions, which doesn’t make a lot of sense” compared to 20 or 30 years ago.
The organization hopes to entice investment from nations with significant stakes in the development of oil and gas, such as Saudi Arabia, the United Arab Emirates, Qatar, and Kuwait.
The bank was mentioned last year in Luanda, Angola, at the ninth African Petroleum Congress and Exhibition. The plan would address issues faced by national oil firms, according to Angola’s President Joâo Manuel Lourenço, who spoke at the event last year.
The decision was made at a time when environmental activists are pressuring several multinational banks to stop financing oil projects because of their high carbon emissions and the transition to sustainable energy.
In light of the net zero campaign, a number of large banks, including HSBC, Standard Chartered, and Standard Bank, declared that they are examining the loans they make for oil and gas projects.