The Africa Energy Bank, a development financial institution being established jointly by APPO and Afreximbank, to address the imminent funding challenge that the African oil and gas industry faces in the light of the decision of climate activist countries and their global financial institutions to end fossil fuel projects financing, welcomes investments from all quarters in and outside Africa, the Secretary General of APPO, Dr. Omar Farouk Ibrahim, has said. Speaking at the Africa Energy Week in Cape Town during the week, Dr. Ibrahim argued that “A country needs not be an oil and gas producer to invest in the new Bank. And a country needs not be on the African continent to do so either. What is important is for the country or investor to share the vision of the bank, that oil and gas have a big role to play for the foreseeable future in the quest to eliminate energy poverty, especially on the African continent.’’
The APPO SG appealed to countries that are oil and gas producing outside Africa, and who share the Bank’s vision of a future for the oil and gas industry, to consider investing in the bank as its success will be a success for the industry.
Participating in a workshop with the theme: Africa’s hydrocarbon : APPO’s Strategic Vision organized by S&P Global the Secretary General delivered a talk on Africa’s Hydrocarbons: APPO’s strategic vision, Dr. Ibrahim stated that the APPO Secretariat had a couple of years ago conducted a major Study on the Future of the Oil and Gas Industry in Africa in the Light of the Energy Transition and the findings of the study informed the strategy the Organization developed. He noted that three imminent challenges face the Africa oil and gas industry as the world pursues the energy transition. These are funding, technology and markets.
To address these imminent challenges, the APPO Long Term Strategy Committee, thoroughly reviewed the outcome of the study and recommendations and came up with the APPO Long Term Strategy, and recommendations on its implementation. These were approved by the APPO Ministerial Council and are currently being implemented. These include the establishment of the Africa Energy Bank, jointly with Afreximbank, the establishment of Regional Centers of Oil and Gas Excellence, and the creation of regional energy markets through the establishment of cross border energy infrastructure.
Further elaborating on the African Energy Bank, the Managing Director of the Africa Energy Investment Corporation, AEICorp, the financial arm of APPO, Mr. Zakaria Dosso, said that negotiations on the establishment documents of the Bank as well as the Charter and Draft Host Country Agreement have been completed and that the next Ministerial Council Meeting of APPO scheduled to take place on 2 November 2023 in Cotonou, Republic of Benin, shall consider and approve the documents and direct on the way forward. Mr. Dosso said that seven APPO Member Countries have expressed interest in hosting the Headquarters of the AEB (Algeria, Benin, Côte d’Ivoire, Egypt, Ghana, Nigeria and South Africa).
Addressing a press conference, the Secretary General said that the APPO is looking to address energy shortage and poverty in Africa using new discoveries of oil and gas reserves to drive more industrialization and modernization. However, there is a perceived push-back on this approach from Western multinationals, governments and organizations that are putting enormous pressure on African countries to descale their use of fossil fuels to reduce their carbon footprint. Noting the determination of the traditional financiers of oil and gas projects in Africa to abandon the industry, the SG said Africa needs to look within and also look elsewhere, like the Middle East to source the funds for oil and gas projects.
Looking to the Middle East and Africa: The money is there
APPO is asking African countries to start looking within to take full control of the industry and avoid dependency on funders that may not share their views of Africa’s climate change and energy poverty dilemma. “We will look to the Middle East and also Africa,” said Dr Ibrahim, adding that funding from the West was most welcome, especially with investors who share APPO’s vision of leveraging the economic growth potential of fossil fuel energy while allowing a “just transition” into clean energy.
“The money is there, it’s a question of prioritizing,” says Dr Omar Farouk Ibrahim when asked about the availability of funds from African investors to drive the initiative. Member Countries would be faced with the decision to allow millions of barrels of oil to stay beneath the ground as dead assets as Western investors pull out of funding production, or if they would stay the course and look to new investment avenues to keep producing energy that will serve Africa’s development needs. The bank is expected to be operational next year.
Regarding technology and collaboration, the SG of APPO and his delegation had a meeting with a representative from Southern Alberta Institute of Technology (SAIT), Ms Monica Benett, on the sideline of AEW. The exchange was essentially on exploring areas of cooperation with APPO and it Member Countries in their quest to master the technology of the industry.
Dr Omar Farouk Ibrahim urged African scientists and intellectuals to be more innovative in doing research and articulating visions that mirror African realities, instead of just emulating others. He argued that Africans should be more assertive in formulating solutions to their own problems and presenting unified positions that reflect the needs of the continent on the global stage.
Under the main theme, the African Energy Renaissance: Prioritizing Energy Poverty, People, the Planet, Industrialization and Free Markets, underscores the importance of shaping the energy landscape in Africa for the betterment of its people and the environment. The theme reflects a commitment to finding innovative solutions that balance the need for energy security, environmental sustainability and economic development, underpinning Africa’s path towards a just energy transition.
African Energy Week (AEW), a partnership between the Africa Energy Chamber and the APPO, is an annual event that brings together leaders, operators, innovators, and experts in the energy sector to discuss and shape the future of energy in Africa. As the continent grapples with the dual challenges of providing access to energy for its growing population while transitioning to sustainable and cleaner sources, AEW emerges as a pivotal platform and brings together stakeholders from the private and public sectors, offering an opportunity for knowledge sharing and collaboration to address critical energy challenges. This event serves as a catalyst for sustainable development and economic growth across the continent.
AEW’s program showcases a range of noteworthy highlights, such as the OPEC-Africa Roundtable; the National Oil Company (NOC) Summit to bring together executives from Africa’s NOCs to engage in discussions encompassing strategies, challenges, and opportunities within the oil and gas sector. It unites African energy policymakers and stakeholders with global investors to discuss and maximize opportunities within the continent’s entire energy industry.
APPO SG had bilateral meetings with strategic partners and potential partners, including the leadership of the Africa Energy Chamber, unarguably the foremost private sector led champion of the African energy cause, led by its Executive Chairman, NJ Ayuk.
