Investments: Why Nigeria pushes for establishment of African Energy Bank ─Minister

*As the international financing institutions significantly reduce hydrocarbon-directed investment amid the COVID-19 pandemic, and the move to cleaner sources of energy, an African Energy Bank will create value in enhancing the continent’s energy future ─Timipre Sylva, Nigeria’s Minister of State for Petroleum Resources

Gbenga Kayode | ConsumerConnect

African energy producers and stakeholders, including Nigeria, have continued to advocate the formation of an African Energy Bank as the African Energy Week (AEW) 2021 event promises to place African financing on top of agenda at its forthcoming transnational forum holding November, in Cape Town, South Africa.

ConsumerConnect reports the African Energy Chamber (AEC) in a statement from the AEC Secretariat made available to the publication, said that Nigeria’s proposal of an African Energy Bank may just be the financing solution the Black continent is seeking as the African Energy Week will drive it.

At AEW 2021, both H.E. Chief Timipre Sylva, Nigeria’s Honourable Minister of State for Petroleum Resources, and H.E. Gabriel Lima will be key speakers, leading a strong delegation from Nigeria and Equatorial Guinea to Cape Town in November, and driving a strong discussion on hydrocarbon investment, financing solutions for African developments, and capital raising in a post-COVID-19 context.

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According to the Chamber, AEW 2021 is committed to African people, finance, and will promote the African energy bank, regional collaboration, and domestic capital as a key driver of continent-wide energy growth.

The AEC noted Chief Sylva also stressed the urgent the need for ‘African raised capital’ in accelerating continent-wide energy growth.

This measure, observers say, becomes necessary in view of the fact that despite the consequences inflicted with the sudden withdrawal of critical capital from the continent, Western countries have continued to phase out fossil fuel-directed investment.

As the international financing institutions significantly, are reducing hydrocarbon-directed investment amid the continued COVID-19 pandemic, and the move to cleaner sources of energy, Chief Sylva reiterated the value that an African Energy Bank will have in enhancing Africa’s energy future.

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The Chamber further also recalled that during a recent state visit to Nigeria, H.E. Gabriel Lima, Minister of Hydrocarbons, Equatorial Guinea; Juan Antonio Ndong Ondo, Director-General of Sonagas; and Malam Mele Kyari, Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC), all emphasised the role that African financing solutions will play in accelerating hydrocarbon development on the continent.

Chief Sylva (in blue suit), Malam Mele Kyari, Group Managing Director of NNPC (left), with  African Energy Week (AEW) 2021 delegation at a meeting in Abuja, FCT   Photo: AEC

As speakers at AEW 2021 in Cape Town, these energy industry leaders will not only contribute to the discussion on African financing, but will drive it, offering up key solutions to Africa’s financing challenges and positioning the continent as a self-reliant energy sector, according to AEC.

It is further noted that Africa’s immense natural resources require significant investment if the continent is to realise its developmental objectives.

The organisation lamented despite the fact that the continent has created the long-demanded enabling environments for investment to thrive, international financiers continue to withhold critical investment.

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The statement observed that Nigeria, for instance, with the implementation of ‘a progressive’ Petroleum Industry Act (PIA), which President Muhammadu Buhari passed into law recently, has ensured its sector is both open and competitive for investment.

Yet, international investment seems unattainable, said the African Energy Chamber.

However, instead of ruing over the situation, it is noted Nigerian Minister of State for Petroleum Resources has opted for alternative financing solutions, with African capital raising initiatives taking the lead in this regard.

Through the establishment of an African energy bank, which enables African project developers adequate sources of finance, Africa will no longer have to rely on the international community to advance its energy sector, the statement said.

The Chamber stated Chief Sylva assured stakeholders, that the proposed African Energy Bank would significantly enhance investment in the African oil and gas sector.

The Bank will serve as a key driver of energy growth, providing the much-needed financial resources to African government, project developers, and stakeholders.

“If we insist on the exploration of our oil and gas reserves when the world is cutting down on investments in the sector, we must set a financial institution, an African energy bank, to develop the oil and gas sector,” said Sylva.

Likewise, H.E. Lima has expressed his support of this concept, with both Ministers looking to increase engagement and partnerships with other African stakeholders.

The concept of an African energy bank holds significant opportunities for resource-rich countries, such as Nigeria and Equatorial Guinea, as feasible and domestic financing opportunities will drive cross-border initiatives across Africa.

Emerging natural gas hubs in Equatorial Guinea and Nigeria, for example, will be able to accelerate regional project development with access to adequate financing, AEC stated.

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