twitter Facebook linkedin acp RSS Feed

Pan-African multilateral trade finance institution, the African Export-Import Bank (Afreximbank), has signed a MoU with the African Petroleum Producers Organization (APPO) for the creation of a multi-billion-dollar energy bank

Afriexim bank 23 MayThe MoU was signed by Rene Awambeng, Director & Global Head, Client Relations, Afreximbank, and Dr Omar Farouk, Secretary General of APPO, at Cape VIII, Luanda Angola 16 May 2022. (Image source: African Energy Chamber)

Aimed at scaling up private sector investment in African oil and gas projects, the bank will provide critical financing for new and existing oil and gas projects, as well as energy developments across the entire value chain. Following international oil company divestment and the shift in global investment trends, the bank comes at a particularly critical time for Africa’s energy sector.

According to the AEC’s Q1 2022 Report, the State of African Energy, from the peak in 2014 at US$60bn, capital expenditure in Africa declined to US$22.5bn in 2020. Despite projected increases to US$30bn in 2020, significant levels of investment are still required, and thus, the role of African financial institutions has been emphasised.

Organisations such as the Afreximbank have already made notable progress to drive oil and gas project developments. At the end of 2020, the Afreximbank’s total assets and guarantees stood at US$21.5bn, with shareholder funds amounting to US$3.4bn. Other institutions including the African Development Bank – with an active portfolio of projects upwards of US$12bn – also represent critical providers across the African energy landscape. However, more needs to be done, and if large-scale discoveries such as those made in Namibia and Ivory Coast are to be sufficiently developed, more capital needs to be made available.