Nigeria Chosen to Host African Energy Bank (AEB)
Nigeria has been selected to host the African Energy Bank (AEB), beating out three rival countries for the rights to the multilateral lender. This decision, made during an extraordinary meeting of the Council of Ministers of African Petroleum Producers (APPO), puts Nigeria at the forefront of the continent's energy future. The first African economy has outpaced other heavyweights, such as Algeria, Benin, and Ghana. Côte d'Ivoire and South Africa did not meet the required conditions and were not represented in the final round.
Nigeria's bid to host the AEB was strengthened in late May after the country ratified the bank's charter and approved a $100 million investment in the bank, exceeding the required $83.33 million for member states. The bank, which does not focus on fossil fuels, is a partnership between Afreximbank and APPO. It aims to finance energy projects on the continent and support its energy transition goals.
The new institution will play a crucial role, providing the necessary financial backbone for energy projects that will stimulate growth and development on the continent. The AEB initially has $5 billion to spend when it takes off later this year. It is open to all, and a member country does not need to be an oil and gas producer to invest. Nor is it necessary for a country to be located on the African continent to do so. What matters is that the investor shares the bank's vision, namely that oil and gas have an important role to play in a foreseeable future in the quest to eliminate energy poverty, particularly on the African continent.
It is clear, given the current global trend, that AEB member countries will be faced with the decision to leave millions of barrels of oil underground as dead assets while Western investors withdraw from production financing, or to maintain course and seek new investment avenues to continue producing energy that serves Africa's development needs. The bank is well-positioned to provide an answer and is expected to be operational next year.