The African Export-Import Bank (Afreximbank) says it is in an advanced discussion with the African Petroleum Producers Organisation, (APPO) for the establishment of an African Energy Bank in support of an Africa-led energy transition strategy.
The new institution is expected to 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 the African Union’s Agenda 2063: The Africa We Want.
Ms Helen Brume, Director, Projects and Asset Based Finance, Afreximbank who disclosed this in a panel discussion at the ongoing Intra-African Trade Fair (IATF2023) in Cairo, Egypt on Saturday said the Bank was expected to provide financing for new and existing oil and gas projects.
IATF 2023 is Africa’s largest trade and investment fair projected to attract over 1,600 exhibitors and 35,000 visitors and buyers.
Attendees include buyers, sellers, importers, exporters, investors, manufacturers, captains of industry, senior government ministers, trade finance and advisory specialists, trade and economic organisations, senior executives from corporates and multinationals, and innovative entrepreneurs from across Africa and beyond
The panel discussion was on the topic: African Energy Transition and African Industrialisation.
The panelists discussed what way the global pursuit of a just transition with the need for energy security presents an opportunity or threat for Africa, and how Africa can utilise its resources to enhance energy access and drive industrialisation.
Although she did not give the timeline for the takeoff of the Energy Transition Bank Ms Brume said when established, it would increase private sector investment in African oil and gas projects to ensure the energy sufficiency of the continent.
She said there was the need for Africa to lead the conversations around what constitute a just energy transition because the continent contributed only three per cent of global emission and at the same time Africa was disproportionately affected by the impact of climate change.
“We will be doing ourselves a great disservice if we do not actively engage in issues that constitute a just energy transition. African countries are at different stages in the path to industrialisation and it is not possible for them to realise their industrialization goal by relying on renewable energy alone,” she said.
She said it was important that Africa relied on its natural resources in its quest to become an industrialised continent.
She suggested that Africa needed to improve value addition to its natural resources, utilise its young workforce to spur the industrialization drive.
Dr Ainojie Irune, Chief Executive Officer, Oando, Energy Resources, said the discussion about energy transition was very important but insisted that Africa should not be pushed into a transition that would not serve its people.
“The transition should not be done at the expense of development and industrialization,” he said.
Dr Omar Farouk,Secretary General, African Petroleum Producers’ Organisation, (APPO) said Africa could not rely on renewable energy to industrialise because the base the base load would not be enough.
He said the developed world did not use renewable energy to industrialise but rather their relied heavily on fossil fuel,
He suggested that the discussion about energy transition should rather focus on using technology to extract the legacy emissions.