Africa Energy Bank: We’ll reject investments that undermine our objectives–APPO

The African Petroleum Producers’ Organization (APPO) has announced that it will not sacrifice the objectives of setting up the African Energy Bank (AEB) for any form of investments. This is as the bank is scheduled to begin operation in this first quarter of 2025.

Omar Farouk Ibrahim, Executive Secretary of APPO stated this in Abuja on Wednesday. According to him, the bank was formed based on need to address the funding gap which has pose a great challenge to the oil and gas industry in Africa.

He explained that the African countries have continued to rely on international funding, neglecting the possibilities of generating funds locally.

According to him, after conducting a study on the future of the oil and gas industry in Africa in the light of the energy transition, the organisation discovered the oil and gas industry in Africa faces three imminent challenges, such as funding, technology, and the challenge of markets.

“There is the challenge of funding, because in the last 70 to 100 years that Africa has been producing oil and gas, we have failed to raise the capital necessary to control that industry and we have relied heavily on outside forces, outside resources. We have been made to believe that we don’t have the money to invest, but it’s not true. The second is technology. Again, for the 70 to 100 years that we’ve been doing this, we have failed to be able to domesticate, take control of the oil and gas industry.

“Even when IOCs come to Africa to do business, their research and innovation centers are in their home countries. As for markets, we are told that we are too poor to buy energy, so the infrastructure to make energy go around is not even there. If you go to every African country that produces oil and gas, the pipelines run from the fields to the seaports to be exported.

“How did we go about addressing these challenges? For the funding challenge, we decided that it is suicidal to have complete trust on those that have traditionally funded our oil and gas projects. This is because we came to realize that for as long as it suits them, they will fund our oil and gas projects. But when it doesn’t suit their interests, even when they know that our lives depend on it, they will not fund it. And this is very clear from what happened up to 2023 that the Ukraine-Russia war started. Before then, we were begging them, please come and invest in Africa, they would say it’s dirty oil, it’s dirty energy.

“Immediately, the Ukraine war started, these same countries were coming to us saying, we are ready to put the money, provided that you produce this energy for us, not for yourselves. This informed our decision to look within for solutions to the funding challenge and this is how APPO went into partnership with African Export and Import Bank to found the Africa Energy Bank. And as you heard me say yesterday, we are not going to open our doors to those who bring in lots of money with a hidden agenda of distracting us from pursuing our objectives,” he said.

Ibrahim stressed that the decision to avoid such investments is driven by the need for Africa to be able to control the activities of the bank for the purpose for which we set it up. “We don’t want anybody to come with billions, lure us into accepting and then derail us from our objectives.”

He explained that the bank has received the high level of commitment from member countries, through the payment of their subscriptions to the share capital of the bank. He added that the organisation has gone beyond having an agreement to having a treaty in force as the required number of member countries sign and ratify the establishment agreement and the charter of the Africa Energy Bank.

Speaking further, Ibrahim stressed on need for African countries to look into developing trade relations amongst themselves and not necessarily between countries in Europe and America.

He noted that even when the economic advantages of collaboration with neighbouring countries are so obvious, mistrust makes such collaborations impossible.

“We have become so preoccupied with defending the so-called sovereignty of our territories that we have lost the core essence of state and governance. This to me partly explains the failure of the African Union. Africa cannot get the full benefit of partnership if we are seen as weak partners. Look at how Europe faces the United States, or China, or India. They have common rules on trade and main endeavours.

“While I believe in global partnership, I also believe that we need to be strong to go into partnership so that we can be treated as equals,” he added.

The organisation had earlier announced its target to grow the value of the $5 billion Africa Energy Bank to $120 billion in 5years.