Afnations have made significant progress in establishing the Africa Energy Bank (AEB), securing 45% of the required $5 billion startup capital.
The bank, set to launch in Abuja, aims to address the funding gap created by traditional investors shifting focus from crude oil to low-carbon energy.
Angola, Nigeria, and Ghana are among the initial backers, with funds raised even before the bank’s legal establishment.
Mr. Omar Ibrahim, Secretary General of the African Petroleum Producers Organization (APPO), said:”We have come a long way. I believe we are the first development bank to progress from conceptualization to near fruition in just over two years.”
The African Export-Import Bank (Afreximbank) signed a memorandum of understanding with APPO in June to establish the energy bank.
The AEB’s launch contradicts resolutions from the last Africa climate summit in Kenya, which called for more taxes on carbon emitters.
However, African countries like Angola and the Democratic Republic of Congo face challenges securing financing for oil projects on international capital markets due to global efforts focused on funding clean energy.
Despite climate change warnings, the African Finance Corporation (AFC) will continue investing in fossil fuels, citing the continent’s significant development needs.
Ex President Buhari and current President Bola Tinubu have advocated a balanced partnership in addressing the climate challenges, emphasizing the importance of fossil fuels in meeting immediate energy needs.
The Afreximbank has cautioned that divestment from fossil fuels could lead to a $30 billion reduction in Nigeria’s GDP.
For many African countries, fossil fuels remain a crucial source of exports, foreign exchange, job creation, power generation, and supply.
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