The African Export-Import Bank, Afreximbank, is set to inaugurate the African Energy Bank in June 2024 with a share per capital would be five million dollars to mitigate the crisis in the African energy sector.
The bank disclosed this during a session on ‘Africa’s Energy Transition and Financing’ at the ongoing Inter-African Trade Fair (IATF) 2023 Trade Conference in Cairo, Egypt.
The Energy Bank will champion energy-related projects for the development of the African continent.
The initiative was conceived in 2022 when Afreximbank signed an agreement with the African Petroleum Producers Organisation, APPO.
Both parties are expected to collaborate on the establishment of an African Energy Transition Bank in support of an Africa-led energy transition strategy.
Rene Awambeng, Director of Client Relations at Afreximbank, said that the bank had partnered with over 700 banks in Africa and its partners to chart a profitable pathway for the African Energy sector.
His words: “In addition to what the bank is doing, with its partners, the management of Afreximbank, working on the sidelines with APPO, has decided to create another agency that will engage in financing the Energy African requirement.
“We are in the final stage of getting all the approvals and it is going to be an organisation set off by treaties.”
“We will have three classes of shareholders, the first will be the African oil-producing countries, national oil companies, and African investors as well as the international investors from all walks of life.
“There will be a process to identify these establishment agreements on the charter to engage in fundraising and commence operations by June 2024.
“The AEB will then be able to help African oil-producing member-states to take advantage of the over 125 billion barrel reserves of oil and that of the over 75 trillion-cubit scuff of gas that we have on the African continent.
“This will not only help in raising the much needed foreign exchange from trading, exporting of these resources after they are transformed which again will lead to industrialisation on the continent.”
The bank would be able to improve developed oil assets and develop infrastructure which was more needed in terms of refineries, logistics, pipelines, and building of storage facilities.
He said: “This will help move the equipment and facilities in a more secure way closer to the market and equally develop the capacity building of the people in the energy sector.
“We are looking forward to this new institution as we are working tirelessly with our partners hoping to sell the gap which is glaring in the sector.”
Awambeng noted that the challenges faced in the energy sector were not new, adding that a lot of the International banks had moved away from financing projects in the sector.