As part of the validation process for Nigeria’s bid to host the headquarters of the African Energy Bank (AEB), a technical inspection team from the African Petroleum Producers Organization (APPO) in Brazzaville and Afreximbank in Cairo—joint promoters of the AEB—has completed its inspection mission. This mission was conducted to assess and confirm Nigeria’s readiness to host the AEB headquarters, which is scheduled to be established in July 2024.
According to a statement by the Permanent Secretary, Ministry of Petroleum Resources, Ambassador Nicholas Ellah, the Bank is coming at a prime time when major policy banks and other western financial institutions are winding down or freezing oil and gas financing and investment, which decreased from $63 billion in 2014, to less than $24 billion in 2022, a consequence of the COVID 19-Pandemic and their several net Zero carbon initiatives as well as the quest for energy security.
“International oil firms are pursuing investments in line with the home country imperatives and in favour and pursuit of renewable energy investment, leaving the global South and sub Saharan Africa with over 450 billion proven reserves of crude oil and Trillions of Cubic feet of gas trapped. Financing for our energy infrastructure has become difficult and endangered while 600 Million Africans suffer massive energy poverty and negative effects of climate change and environmental hazards,” the statement reads.
The world Bank estimate that sub Saharan Africa requires $75 billion in annual financing and project funding for the next 10 years (2023-2037) totaling $750 billion to support and unlock huge energy diversification for gas, oil and condensates production excluding other infrastructure assets in power and related infrastructure that are needed to unbundle and compensate for on going depressed financing drawbacks.
Thus, the $5 billion Africa Energy Bank, when headquartered in Nigeria, shall be the largest single foreign direct investment inflow into Nigeria in over two decades.
Nigeria’s bid to establish the bank started two years ago, with APPO Luanda 2022 Ministerial Resolutions 282bas directed by the former administration of Muhammadu Buhari.
“After the first bidding round in early 2024, only four countries were pre-qualified as having met the minimum requirements to proceed to the final round of bidding, as at March 2024. The four APPO members prequalified were Nigeria, Ghana, Benin and Algeria, to proceed and contest for the final right to host the headquarters of the SupraNational Multilateral $5 Billion Dollar Africa Energy Bank that will specialize and facilitate financing of Africa’s trapped hydroCarbon deposits of – Oil, Gas, Condensates as well as support Energy Transition dynamics and net,” the statement reads.
Ellah disclosed that the Ministry of Petroleum Resources, in preparation for its bid, had in January 2024 sought and obtained the Federal Ministry of Justice and consultant experts opinion in “vetting, perusing and commenting on the Banks proposed Charter, The Establishment Agreement, “The Treaty” and Headquarters Host Agreement giving us the go ahead and impetus to proceed. We also sought the approval of the Federal Executive Council and for Parliamentary (National Assembly) Ratification – this process which gave approval which is ongoing, will provide the AEB with the required privileges and immunities needed by Treaty signatories to recognize and implement the Bank’s global vision and operations in line with its Charter.”
So far, the ministry has completed key requirements for the bid which include location and financing.
“We are happy to announce thatNigeria’s share of the equity of the proposed AEB, was $83.33 million for class A shares. We are happy to inform the Public that President Bola Ahmed Tinubu has since approved $100 million upscale investment crowdfunding subscriptions from four agencies of the Ministry of Petroleum Resources, as Nigeria’s subscription which is $16.7 million higher than the $83.33 million minimum requirement allotted to Nigeria; This presidential decision pivots Nigeria in a pole position to win this bid, that will reshape our Oil and Gas Ecosystem and Infrastructure investment for several years to come.
“President Tinubu, also directed and approved that the Honorable Minister of State for Petroleum Resources Oil, Senator Heineken Lokpobiri, to request for extra budgetary approvals and other support needed to ensure Nigeria wins the headquarters hosting rights. Accordingly, out of the approved sum of $100 million, more than $63 million has been secured and currently escrowed in a Joint APPO-AEB bank deposit account as at today.”
