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The African Export-Import Bank (Afreximbank) and the African Petroleum Producers’ Organisation (APPO) have formally established the Africa Energy Bank (AEB), marking a major step in efforts to strengthen Africa’s energy security and finance the continent’s growing energy needs.

The announcement was made at the bank’s inaugural general meeting in Abuja on 31 October.

The new institution is being launched as Africa faces an estimated $200 billion investment gap in the energy sector. Its founders said the bank will help fill the financing shortfall as many traditional lenders reduce funding for fossil fuel projects, despite oil and gas continuing to play a key role in African economies.

With authorised capital of $5 billion, the Africa Energy Bank will support projects across the energy value chain, including exploration, production, transportation, processing, refining and distribution.

Backers of the initiative said the bank would help expand energy generation and transmission capacity, support industrialisation, reduce dependence on imported petroleum products and boost intra-African trade in energy products. The institution will also seek to ensure greater African participation in developing the continent’s energy resources.

The AEB will operate as an independent pan-African financial institution and aims to attract investment from governments, national oil companies, financial institutions and private investors.

Delegates at the inaugural assembly appointed Helmy Ghazi as the bank’s first president and approved its inaugural board of directors.