Nigeria has officially contributed $69.1 million in equity funding to the newly established African Energy Bank (AEB), which is set to support and finance energy projects across the continent.
The federal government announced that the AEB, with an initial capital base of $5 billion, is set to commence operations on January 28, 2025, in Abuja.
The AEB’s mission focuses on financing oil and gas projects while advancing Africa’s energy transition goals. To achieve this, Nigeria pledged a total equity contribution of $100 million, surpassing the minimum requirement of $83 million set for participating nations. Collectively, African member states aim to contribute approximately $1.5 billion towards the AEB’s initial $5 billion target capital.
Mr. Nicholas Ella, the Permanent Secretary of Nigeria’s Ministry of Petroleum Resources and an Executive Board member representing Nigeria at the African Petroleum Producers Organisation (APPO), revealed this development on recently during the 19th Executive Board meeting of APPO in Yaoundé, Cameroon. The Ministry of Petroleum Resources issued a statement confirming this recently.
Mr. Ella emphasised Nigeria’s commitment to APPO’s goals and the immediate establishment of the energy bank in Abuja. “I am pleased to address the Executive Board meeting on this very important subject matter – the take-off of the Africa Energy Bank Headquarters in Abuja, Nigeria,” Mr. Ella said.
Earlier in July 2024, Nigeria secured the hosting rights for the AEB Headquarters, outbidding competitors such as Ghana, Algeria, South Africa, and Benin Republic. Renovation work on the headquarters building, which was inspected on May 24, 2024, is ongoing, with Nigeria promising to deliver a fully furnished facility in time for the bank’s launch.
“We have the full support and cooperation of Mr. President and our National Assembly to actualize this project in Nigeria,” Mr. Ella said, drawing applause from representatives of 13 member countries in attendance.
The operational date for the AEB coincides with the 38th anniversary of APPO, an 18-member bloc dedicated to promoting the development of the African energy industry. The establishment of the AEB is a joint effort between APPO and the African Export-Import Bank (Afreximbank), designed to bridge the financing gaps in Africa’s oil and gas sector.
Highlighting Nigeria’s readiness, Ella noted that the Federal Executive Council (FEC) had approved the hosting of the bank on June 25, 2024, and ratification processes were in advanced stages. The Attorney General concluded the ratification process on September 9, 2024, with documents now awaiting presidential assent before submission to APPO.
Mr. Ella provided an update on Nigeria’s equity contribution: “Apart from the earlier payment of $59,120,000, an additional $10 million was paid into APPO’s account by the Federal Government last week. We intend to make full payment before the bank takes off.” He urged APPO to incorporate the funding of the AEB into its budgetary plans to meet Africa’s energy financing needs and attract vital investments.
Dr. Omar Farouk Ibrahim, Secretary General of APPO, affirmed that 50 percent of the funds required for the AEB’s launch had already been secured. “I would like to urge APPO member countries to keep up the tempo for the Bank’s take-off,” he stated.
Egypt’s APPO Executive Board member, Mr. Hisham Ahmed Selim, commended Nigeria’s progress and described the update as “encouraging.”
The establishment of the African Energy Bank is anticipated to be a crucial step in ensuring financial support for Africa’s energy sector, fostering economic growth, and promoting sustainable development across the continent.
