THE African Petroleum Producers’ Organization (APPO) and the African Export-Import Bank (Afreximbank) have reported significant progress in establishing the $5 billion Africa Energy Bank (AEB), a landmark initiative designed to address the continent’s persistent energy financing challenges.
The update was delivered on Monday during the Africa Energy Week: Invest in African Energies* forum in Cape Town.
Speaking at a workshop titled Africa Energy Bank Take-Off – Bridging the Financing Gap for Africa’s Energy Sector, APPO Secretary General Omar Farouk Ibrahim, said the institution has made rapid strides in mobilizing capital.
“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.
Highlighting Africa’s stark energy access deficit, he noted that over 600 million people on the continent still live without electricity, despite Africa exporting about 75% of its oil and 45% of its gas.
“If we want energy for our people, then we have to fund the projects,” he stressed, adding that Africa must lead its own financing efforts rather than relying solely on external support.
Haytham El Maayergi, Executive Vice President of Afreximbank, underscored the financing hurdles African countries face.
“Africa is being penalized. We pay more per kilowatt before subsidies than anywhere in the world, because energy projects cost more to finance here. When we borrow, we pay higher rates due to lower credit ratings. It’s a toll on Africa,” he said.
The workshop outlined the scale of the challenge: Africa currently attracts only 4% of global climate finance, even though the continent will require between $1.6 trillion and $1.9 trillion by 2030 to transition toward clean energy.
Closing the annual $31–50 billion energy finance gap is critical not only for expanding electricity access but also for protecting government revenues, as fossil fuels account for 35–82% of state budgets in some producer nations.
The Africa Energy Bank, once operational, is expected to provide tailored financing for oil, gas, and renewable projects, enabling Africa to chart a more independent path in securing energy for its people while accelerating industrialization and development.
