Nigeria Contributes $69.1m Equity Funding To African Energy Bank

Nigeria has officially contributed $69.1 million in equity funding to the newly established African Energy Bank (AEB), which aims to support energy projects across the continent.

The federal government said the operationalisation of the $5 billion AEB is set for 28th January 2025 in Abuja,

The AEB, with an initial capital of $5 billion, will focus on financing oil and gas projects while addressing Africa’s energy transition goals

Nigeria has an equity funding contributions of $100 million, exceeding the minimum requirement of $83 million for other countries

Collectively, the continent is aiming for around $1.5 billion from all member states, which are part of the AEB’s initial target capital of $5 billion.

A Nigerian delegation led by Nicholas Ella, the permanent secretary, Ministry of Petroleum Resources, and executive board member representing Nigeria at the African Petroleum Producers Organization (APPO), made the disclosure on Wednesday at the 19th Executive Board meeting of the Organisation in Yaounde, Cameroon, according to a statement issued on Friday by the ministry.

Ella reiterated Nigeria’s commitment to the ideals of APPO and the immediate setting up of the energy bank in Abuja.

Recall that Nigeria won the hosting right for the establishment of the Africa Energy Bank (AEB) Headquarters in July 2024, after it competed with Ghana, Algeria, South Africa, and Benin Republic.
The AEB aims to bridge financing gaps in the continent’s oil and gas industry.

“I am pleased to address the Executive Board (EB) meeting on this very important subject matter – the take off of the Africa Energy Bank Headquarters in Abuja, Nigeria.”

“As you are no doubt aware, the Headquarters building (of the Africa Energy Bank) was inspected by the Technical Team on 24th May 2024, and renovation works for its completion are ongoing. Nigeria is fully committed to delivering the building with furnishing to the bank in good time. We have the full support and cooperation of Mr President and our National Assembly to actualise this project in Nigeria,” Amb Ella said, drawing applause from representatives of 13 member countries who were at the meeting in Yaounde.

The ministry said the date for the Bank’s take-off coincides with the 38th anniversary of the establishment of APPO, an 18-member country bloc that drives the development of the African energy industry.

The AEB is being established by APPO in collaboration with the AfreximBank.

Giving further insights on the level of Nigeria’s preparedness for the bank’s take off, the Permanent Secretary reminded the gathering that Nigeria’s Federal Executive Council on 25 June 2024, “approved the hosting of the Bank.”

He added that the “ratification of both the Charter and Headquarters Agreement are in an advanced stage. In its decision, the FEC also approved and endorsed the Establishment Document of the AEB and instructed the Attorney General and Minister of Justice to commence with the process of ratification.

“The Attorney General concluded the process on 9th September 2024 and transmitted the AEB Establishment Documents currently with the President for his assent. Once that is done, it will be forwarded to APPO.”

On equity contribution to the AEB, Amb Ella said Nigeria is currently making efforts to complete her own share of the equity contribution to the AEB. “Apart from the earlier payment of $59,120,000:00, an additional $10 million was paid into APPO Account by the FGN (Nigeria) last week. We intend to make full payment before the bank takes off.

“Nigeria wishes to advocate for the establishment and funding of the Africa Energy Bank as part of APPO’s budgetary plans. This initiative would not only address the financial needs of the energy sector but also provide a platform for mobilising investments in oil and gas projects, which are vital for Africa’s economic growth and development.”

In reaction to Nigeria’s update on preparations for the Bank’s operationalisation, the Secretary General of APPO, Dr Omar Farouk Ibrahim, said 50 per cent of the funds needed for the AEB take-off was available.

“I would like to urge APPO member countries to keep up the tempo for the Bank’s take-off,” Dr Ibrahim said.

Furthermore, he explained that the Bank would have three classes of shareholders with APPO and Afrexim occupying the priority shareholder position.

Responding to Nigeria’s presentation, the APPO Executive Board member from Egypt, Hisham Ahmed Selim, described Nigeria’s explanation concerning preparations for Bank’s take-off as “encouraging,” the permanent secretary stated.