African Export-Import Bank (Afreximbank) has signed an agreement with the African Petroleum Producers Organization (APPO) to establish an African Energy Transition Bank in support of an Africa-led energy transition strategy.
The new institution will accelerate Africa’s economic development, whilst ensuring this progress is compatible with, and complementary to, the Sustainable Development Goals (SDG) as well as the continent’s long-term social and environmental objectives as set out in African Union’s Agenda 2063: The Africa We Want.
The African Energy Transition Bank will address urgent and existential needs on the continent.
According to the agreement, Africa’s transition towards alternative energy sources presents great opportunities for the continent, this transition must be carefully managed to minimise the short-term adverse impacts of the transition while maximising its longer-term benefits. The new bank’s responsibilities will include the management and encouragement of such a productive transition. APPO member states will be signatories to the bank’s constitutional documents which will be structured in the form of a multilateral treaty, and invest equity into the new vehicle, while Afreximbank will co-invest and advise on the establishment and implementation process.
Read also: Wema Bank: Showcasing strong growth trajectory
Benedict Oramah, president, Afreximbank, commented: “We are delighted to be collaborating with APPO towards the establishment of the proposed African Energy Transition Bank. These are challenging times when we must strive to strike the right balance between the imperatives of mitigating climate change and the urgency of averting social upheavals as a result of increasingly difficult economic and financial conditions in Africa. For us at Afreximbank, supporting the emergence of the African Energy Transition Bank will enable a more efficient and predictable capital allocation between fossil fuels and renewables. It will also free human and other resources at Afreximbank that will make it possible to support its member countries more effectively in the transition to cleaner fuels. We thank the members and leadership of APPO for their confidence in Afreximbank to support them as they embark on this very important initiative.”
Omar Farouk Ibrahim, APPO secretary-general, said, “the event marks the beginning of Africa taking its destiny into its own hands. For too long we have looked outside for solutions to our challenges – access to finance, access to technology, access to markets – and so on. We have come to believe that without foreign support we cannot make any progress in addressing these challenges on the African continent.”
