African Energy Week (AEW): Africa Energy Bank Moves To Close Continent's Energy Finance Gap

The African Petroleum Producers' Organization (APPO) and Afreximbank shared updates on the establishment of the $5 billion Africa Energy Bank on Monday at AEW: Invest in African Energies, aimed at addressing Africa's persistent energy financing challenges.

Speaking during a workshop titled Africa Energy Bank Take-Off – Bridging the Financing Gap for Africa's Energy Sector, Dr. Omar Farouk Ibrahim, Secretary General of APPO, said the bank has made rapid strides in raising funds.

“We have succeeded in raising a large chunk of the funds we needed to get this bank started. In the last two to three years, we have achieved what no other development bank has in terms of the timeline,” Ibrahim said. He highlighted the continent's energy access challenges:“More than 600 million Africans lack electricity... yet we export 75% of our oil production and 45% of gas. If we want energy for our people, then we have to fund the projects.”

Ibrahim emphasized that Africa must lead its own energy financing.“We have a duty to ensure the African continent is not left behind in terms of energy access; in doing so, we cannot continue to look to others to help us. If we get outside support, it should be to supplement what we have done.”

Haytham El Maayergi, Executive Vice President of Afreximbank, noted the continent's current financing challenges.“Africa is being penalized – we pay more per kilowatt before subsidies than anywhere in the world, because the costs of financing energy projects are higher. When we borrow, we pay more because our credit ratings are not as high... It's a toll on Africa.”

According to the workshop presentation, Africa currently receives only 4% of global climate investment, while $1.6–$1.9 trillion will be required by 2030 to transition away from fossil fuels. The annual energy finance gap is estimated at $31–50 billion, and fossil fuels still account for 35 - 82% of government revenues in some countries, making closing these gaps critical to achieving energy access and supporting development.

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