THE Africa Energy Bank, a landmark initiative aimed at funding oil and gas projects across the continent, is set to commence operations by mid-2025, according to an Afreximbank official. The bank is a joint effort between Afreximbank and the African Petroleum Producers Organisation (APPO) to address funding gaps in Africa’s energy sector amid global pressure to shift investments away from fossil fuels.
South Africa has also signalled interest in joining, expanding the list of participating nations beyond APPO members.
Capital raising in progress, trading to begin soon
Speaking on the sidelines of the 2025 Mining Indaba in Cape Town, Denys Denya, Afreximbank’s Senior Executive Vice President, confirmed that capital raising is currently underway, with several countries already committing funds.
‘We are in the capital raising phase. A number of countries have already put in the money, (so) we’re talking to a number of countries to bring in the capital so that we can start trading,’ Denya told Reuters.
He further emphasised that the bank is on track to begin operations:
‘Definitely, we’ll start trading this year. We’re hoping that we can start trading before the half-year stage.’
Despite this progress, Afreximbank has yet to disclose specific funding commitments from participating countries.
A $5bn investment in energy security
The Africa Energy Bank will be headquartered in Nigeria and launch with an initial capitalisation of up to $5bn. The financial institution aims to provide tailored funding solutions to meet Africa’s growing energy demands, ensuring that oil and gas projects remain viable despite the retreat of global banks from fossil fuel investments.
Denya confirmed that several APPO member countries, including Angola, Egypt, Nigeria, and Ghana, have already committed funds. However, he also revealed that non-APPO members, including South Africa, have expressed interest in joining the initiative.
South Africa’s Department of Mineral Resources Director General, Jacob Mbele, confirmed to Reuters that the country is considering participation and has requested the bank’s prospectus before committing to a specific funding figure.
Why Africa needs an energy bank
With global financial institutions scaling back investments in fossil fuels due to climate concerns, many African nations are struggling to secure financing for critical oil and gas projects. The Africa Energy Bank seeks to fill this gap, ensuring that energy-rich nations can continue developing their natural resources while balancing sustainability and economic growth.
Key objectives of the bank include: providing financial support for oil and gas exploration and production, reducing Africa’s reliance on foreign financial institutions for energy project funding and strengthening regional energy independence by keeping investments within the continent.
While renewable energy projects are also gaining momentum, many African economies remain reliant on oil and gas revenues, making this initiative a critical step in maintaining energy security.
As the continent moves towards strengthening its energy financing framework, the Africa Energy Bank could redefine investment dynamics for Africa’s oil and gas industry.
