As part of its move towards enhancing Africa’s energy infrastructure and investment landscape, Nigeria has progressed in its bid to host the headquarters of the African Energy Bank (AEB).
A technical inspection team from the African Petroleum Producers Organization (APPO) and Afreximbank recently concluded a mission to assess Nigeria’s readiness to accommodate the AEB headquarters, slated for establishment in July 2024.
According to Ambassador Nicholas Ellah, the Permanent Secretary of the Ministry of Petroleum Resources, ”the establishment of the AEB comes at a crucial juncture marked by dwindling investments from major policy banks and Western financial institutions in the oil and gas sector.”
”Factors such as the COVID-19 pandemic, net-zero carbon initiatives, and energy security imperatives have contributed to a decline in financing for oil and gas projects, leaving vast hydrocarbon reserves in sub-Saharan Africa underutilized.
”With an estimated annual financing requirement of $75 billion for the next decade, sub-Saharan Africa faces significant challenges in unlocking its energy potential and addressing energy poverty amidst climate change concerns.
”The establishment of the $5 billion Africa Energy Bank in Nigeria is poised to become the largest single foreign direct investment in the country in over two decades,” Ellah noted.
Nigeria’s bid to host the AEB headquarters began two years ago, spurred by Ministerial Resolutions at the APPO Luanda 2022 summit.
Following a rigorous selection process, Nigeria, alongside Ghana, Benin, and Algeria, emerged as prequalified contenders to host the AEB headquarters.
In preparation for its bid, Nigeria has fulfilled key requirements, including legal vetting of the bank’s charter and securing equity investment.
Experts say President Bola Ahmed Tinubu’s approval of a $100 million upscale investment, surpassing the minimum requirement, is proof of Nigeria’s commitment to winning the bid.
Additionally, out of the approved sum, over $63 million has already been secured and escrowed, demonstrating proactive efforts to strengthen Nigeria’s position in the bidding process.
Ellah emphasized Nigeria’s readiness to host the AEB headquarters, citing robust legal and financial frameworks in place to support the initiative.
Officials say Nigeria aims to secure the hosting rights for the AEB headquarters, thereby reshaping the region’s oil and gas ecosystem and infrastructure investment landscape for years to come.
In a related development, Nigeria is set to witness a significant injection of foreign investment in its energy sector as French energy giant TotalEnergies prepares to allocate $6 billion over the coming years.
The investment primarily targets gas and offshore projects, marking a pivotal move in the country’s energy industry.
TotalEnergies CEO Patrick Pouyanné expressed the company’s readiness to channel substantial funds into Nigeria’s energy landscape during talks with President Tinubu in Abuja recently.
