The proposed Africa Energy Bank will start in the first quarter of 2025 even though the $5bn needed for the take-off is not yet ready.
The Secretary-General of the African Petroleum Producers’ Organisation, Omar Farouk, stated this on Tuesday at the ongoing Practical Nigerian Content Forum in Yenagoa, Bayelsa State.
Farouk said the bank would not be kept waiting till the $5bn was realised.
This is even as he said the bank would not be funded by any Western governments committed to energy transition.
Also, the Minister of States for Petroleum Resources (Oil), Heineken Lokpobiri, corroborated that the bank, whose headquarters will be in Abuja, would start operations within the first three months of next year.
According to Farouk, when talking about the Africa Energy Bank in 2022 many people thought it could not happen because Africa was too poor and too dependent.
However, he said by the time the bank takes off next year, it will be the first development bank that has been started from conception to realisation in record time in just two years.
“All the studies were completed in under two years. All the negotiations were completed in under two years. We were able to sign the agreement with the founding member countries. In two years, we were able to get our member countries to sign and ratify the establishment documents, not all 18.
“We made it very clear that we need only two member countries to sign and ratify for it to become a treaty; other countries can join. And as today, Ghana was the first to sign and to ratify. Nigeria is the second. And that means we meet the requirements for the take-off of the bank.
“Nigeria was given the hosting right of the headquarters. Seven countries bid for that headquarters. Eventually, four were shortlisted, and the technical team went to the four countries to see what they had on the ground. On the fourth of July, the ministerial selection committee said Nigeria had the highest marks and Nigeria got it. It will be in Abuja,” he said.
On staff hiring, the secretary-general said PwC was hired as a consulting firm to help with the project management of that bank.
“Last week Friday, I signed the contract with PwC, and it is their job to help us with the initial hiring recommendation. The final decision, of course, is ours,” he stated.
Speaking about capital, Farouk revealed that even before signing the establishment of agreements, the bank was able to raise 50 per cent of what was needed to start off the bank.
“The most important thing now is the capital. I want to say with all sense of pride that even before we had signed the establishment agreement, we were able to raise nearly 50 per cent of what we needed to be able to start the bank. By the way, I said $5bn. But we are not going to wait until we are able to get $5bn before we start. With $500m, we get a skeletal bank working. And once you do that, you see other countries coming in. Everybody is like they are waiting to see. Is it going to be a reality?
“And so far, a number of our member countries have been able to come even before we have started to say ‘we trust you enough. We are giving you this. That is enough to show that this is a different Africa from the Africa of the past. We are taking our destinies into our own hands. We are committed to seeing that this bank takes off before the end of the first quarter of next year, and I sincerely hope that Nigeria will not fail us, because you will need to give us the building. We have seen the building, but it’s not just a building. Yes, we need to be able to have a place that we can readily move in before the end of March,” he said.
He added that the bank is looking up to investors.
“We are looking at $5bn as our capital, and we have three classes of shareholders: Class A, essentially APPO member countries; Class B, non-APPO African countries; and Class C, any other investor across the world. But we are careful, we are not key on going out to countries or people who do not share our belief that oil and gas have a big role to play in the supply of the global energy mix in the foreseeable future.
“If you are committed to energy transition, we don’t want your money, because we don’t want you to come and put your money in that fund and derail us from our objectives. Because to you, $5bn is nothing. To us, it’s a lot of money. So, don’t come and put $3bn and then hijack the bank,” he cautioned.
Speaking about the bank, the oil minister, Lokpobiri said by a resolution reached in Cameroon on November 1, the energy bank will come on stream by the first quarter of 2025.
“This is the bank that will start With $5bn and will grow by 2028 to about $120bn.
“But all these things can only be sustainable if we are able to sustain our local content, our local capacity to be able to grow this industry and provide the energy solutions that we need in Africa,”
