In a historic first for Africa's energy sector, Nigeria, Angola and Ghana have pledged their share of capital to establishing the Africa Energy Bank (AEB). The milestone represents 44% of the minimum funding for members of the African Petroleum Producers Organization (APPO) aimed at commissioning the bank into operations. This development was made public by Dr. Omar Farouk Ibrahim, APPO's Secretary General, during the Congo Energy & Investment Forum last week.
The AEB will lend to oil and gas projects across the continent, which will overcome the funding barrier that has been caused by the reluctance of traditional Western lenders to lend to fossil fuel projects for environmental reasons. APPO has requested all its 18 member states to contribute $83 million, aiming to raise a total initial capitalization of $5 billion. Beyond Nigeria, Ghana and Angola, five other members – Equatorial Guinea and Ivory Coast, Republic of Congo, Benin, and Algeria – have pledged to settle their contributions, in keeping with the bank's vision of opening for operations during the first half of 2025.
Nigeria is the biggest oil producer in sub-Saharan Africa, and the nation has much to offer in the oil and gas industry, such as a 2025 bid round. Installation of the Petroleum Industry Act has introduced regulatory reforms aimed at increasing transparency and investment, pushing major projects to move forward. Recent FIDs: Some of the recent FIDs that are significant include TotalEnergies' $550 million Ubeta Gas Field Development and Shell's $5 billion Bonga North Project, but additional funding is critical to propelling Nigeria's gas agenda and unlocking its full potential for the energy transition.
Angola, meanwhile, is actively diversifying its energy portfolio while advancing major deepwater developments, including TotalEnergies' $6 billion Kaminho Deepwater Project, Eni's Agogo Integrated West Hub and a limited public tender, with a long-term goal of increasing production to 2 million bpd. The country plans to make an FID on its first green hydrogen project by 2025 – a 600 MW development led by Sonangol in collaboration with international partners. In addition, Angola is spearheading its first non-associated gas project, the New Gas Consortium, and undertaking a $12 billion expansion of the Angola LNG plant to boost its gas monetization activities.
Ghana is making its role as a leading oil and gas player more entrenched with the new investment pledges by Eni and Tullow Oil. Eni and Ghana National Petroleum Corporation entered into an agreement in March to ramp up offshore exploration, develop mature assets to the fullest and advance untapped reserves. This follows regulatory reforms brought this year to improve fiscal terms, transparency and investment incentive. Tullow Oil remains also a core component of Ghana's energy economy, with Jubilee and TEN field production fueling economic growth and development plans to start a drilling program in May 2025 to add new production. During these developments, the establishment of the AEB is a strategic response to Africa's need for specialized financial institutions that understand the continent's unique energy environment.
By providing tailored financing products, the Bank can accelerate energy project development, enhance energy security and stimulate economic growth. With increasingly more countries investing capital shares, the bank will play a central role in liberating investment, bridging the funding gap and ensuring the success of sustainable energy expansion in Africa.