Oil-focused Africa Energy Bank to open early Nov, says APPO's Ghezali

The long-awaited Africa Energy Bank will formally open in early November with $500 million of capital to deploy, and could fund as many as three oil and gas projects in 2027, the new secretary general of co-owner APPO told Platts, part of S&P Global Energy, in an interview.

Speaking on the sidelines of the Africa Energy Week conference in Cape Town on Oct. 15, Farid Ghezali, who took over the African Petroleum Producers' Organization earlier this year, said "administrative formalities" were being concluded ahead of the launch.

Co-owned by APPO and Afreximbank, the institution – which will be headquartered in Abuja – aims to tackle longstanding financial challenges facing African energy projects, following the flight of western capital from fossil fuels. The initial endowment has been raised entirely from APPO members and Afreximbank.

"We have the capital, $500 million," Ghezali said. He now aims to "go to the market, we can raise $5 billion. And the goal is to achieve $10 billion by the end of next year".

The secretary general said the initial focus will be on cross-border projects, such as regional refineries and pipelines like the Central African Pipeline System, which would span six countries.

"[The bank] will be making investment decisions in 2027. My wish is to have at least three projects financing in 2027," he said.

And while the bank will prioritize oil and gas projects at first, Ghezali said, it aims to eventually expand its footprint into electricity, clean cooking and minerals.

"We are going to give some appetite to other institutions to come with us and finance oil and gas," he said, noting the positive impact of the Iran and Ukraine wars on Africa's investment outlook.

"The energy market worldwide is a little bit difficult, so investors need to put their money somewhere else, and I think Africa is a good choice, with lots of opportunities, lots of resources," he said.

Key priorities

Beyond the AEB, Ghezali said he was focused on strengthening energy cooperation between African governments, making APPO more efficient and visible, harmonizing oil and gas regulations between countries and strengthening African national oil companies.

Ghezali said he sees APPO playing a diplomatic role in disputes between regional producers, and even participating in negotiations between African countries and international oil companies to ensure resource extraction benefits local populations.

"We are also going to present a new strategy [for] how to think about new partnerships with IOCs," Ghezali said. "If you need APPO to assist you to negotiate ... we will be part of it."

Another top focus for APPO is building up domestic energy markets and swapping raw commodity exports for value addition, he said, at a time when the Middle East conflict is roiling global markets and pushing up refined product prices. Most African oil producers, with the exception of Nigeria, are reliant on imported fuels.

"The domestic market has more value than exports for me," said Ghezali. "We are working on the African refining model. We need to transform at least 80% of our production if you want to be insulated from turbulence from the international market."