Africa Launches $5 Billion Energy Bank as Western Lenders Retreat
OilPrice.com · Haley Zaremba ·
Afreximbank and APPO have set up a $5 billion Africa Energy Bank to fund oil and gas projects as Western investment falls, but the need is far larger.
Africa needs $200 billion in annual energy investment, according to the Independent Petroleum Producers Group (IPPG). Around 600 million people across Africa lack access to electricity, a problem that could quickly intensify as sub-Saharan Africa rapidly grows, develops, and industrializes. The region’s energy demand is expected to increase threefold over the next decade, as emerging economies develop and the population continues to boom. But Western investors are pulling out of the continent right when funding is most needed. To fill this gap, a brand new $5 billion financial institution, the Africa Energy Bank, has been established by the African Export-Import Bank (Afreximbank) and the African Petroleum Producers' Organisation (APPO) to finance oil and gas projects across Africa.
“The establishment follows years of efforts by Afreximbank and APPO to create an African-led financing institution capable of supporting energy projects that have struggled to attract funding from international lenders,” Business Insider Africa reported earlier this week. “This comes as oil and gas investment in Africa fell from $68 billion in 2016 to about $37 billion in 2025.”
Africa is caught in the middle of an energy trilemma. The continent’s population is on track to double between now and 2050 – by midcentury one in four people in the world will be in sub-Saharan Africa. Meeting projected demand will require power generation capacity to increase ten-fold by 2065, according to figures from the European Commission’s Joint Research Centre.
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