An agreement to establish an African energy bank has been reached by African Export-Import Bank (Afreximbank) and the African Petroleum Producers Organisation (APPO).
The energy bank is meant to boost investment in the sector within the continent, as western investment in oil exploration declines amid adoption of green economy, which is the non-usage of fossil fuels.
Ripples Nigeria had previously reported that international oil companies (IOCs), Shell, Total Energies, and ExxonMobil were exiting Nigeria’s onshore oilfields to financially strengthen their green energy business.
It was gathered that the call for green energy was eating into the capital used to grow the oil sector, and this was affecting oil-dependent developing countries like Nigeria.
The agreement to create the energy bank was signed by Director and Global Head, Client Relations, Afreximbank, Rene Awambeng and Nigeria’s Omar Farouk, Secretary General of APPO, at the ongoing 8th African Petroleum Congress and Exhibition tagged “CAPE VIII” in Luanda, Angola.
Nigeria is one of the countries pushing for the investment bank’s creation, with the Minister of State, Petroleum Resources, Timipre Sylva, stating that it would counter the threat of the declining hydrocarbon investment.
This comes on the heels of the Organisation of Petroleum Exporting Countries (OPEC) disclosing that production efficiency for the next 25 years will cost the global oil industry $12.6 trillion worth of investments in the downstream, midstream, and upstream.
Commenting on the new development and the role the energy bank will play in direct investment to Africa, a statement released by the parties said, “The two African institutions have resolved to work together to find an Africa-led solution to the threat posed to the African oil and gas industry and an orderly energy transition in Africa by the withdrawal of funding by its traditional financiers.
“The two institutions have committed to taking necessary actions to promote a sustainable and balanced solution to the challenge of financing the oil and gas industry in Africa during the energy transition.
“This will be done through, among others, the establishment of an African energy transition bank dedicated to supporting an Africa-led energy transition strategy that is consistent with the goal of preserving the environment and livelihoods.” the communique reads.
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