Africa Oil Producers Raise Almost Half of the Seed Capital Needed for $5 Billion Energy Bank

(Bloomberg) -- African oil-producing countries who plan to start a $5 billion energy bank next year have raised 45% of the startup capital needed for the lender that aims to fill a funding gap caused by traditional investors turning away from crude to low-carbon energy.

The funds were raised “even before” its legal establishment, with Angola, Nigeria, and Ghana among its initial financial backers, Omar Farouk Ibrahim, secretary general of the African Petroleum Producers Organization, said on the sidelines of the Angola Oil & Gas conference in Luanda, the capital.

Africa’s petroleum ministers will meet on Nov. 1 to finalize the launch date of the bank that will be headquartered in the continent’s largest oil producer, Nigeria, said Ibrahim.

African Export–Import Bank, the main funder of the project, signed a memorandum of understanding with APPO in June to establish the bank.

Global efforts to fund clean energy in a bid to eliminate net greenhouse gas emissions mean that African nations, such as Angola and the Democratic Republic of Congo, may struggle to raise financing for oil projects on international capital markets.

“We have come a long way,” Ibrahim said. “I believe we are the first development bank to progress from conceptualization to near fruition in just over two years.”