The African Export-Import Bank (Afreximbank) has announced a groundbreaking initiative aimed at addressing the funding gap in Africa’s power sector.
The bank, headquartered in Cairo, Egypt, has revealed plans to establish an energy bank that will focus on financing clean and renewable energy projects, promoting regional integration of energy markets, and supporting local content development.
With a projected capital base of $3 billion, the African Energy Bank is expected to become a catalytic force for the continent’s energy transformation agenda.
The new institution will help bridge the gap in financing for clean and renewable energy projects, which currently stands at an estimated $60-100 billion annually, according to Afreximbank President Benedict Oramah.
The African Energy Bank is part of a broader effort by Afreximbank to support Africa’s transition to a low-carbon, climate-resilient economy.
According to Oramah, the new institution will provide long-term financing for projects in renewable energy, storage, transmission and distribution infrastructure, as well as clean technologies such as electric vehicles and green hydrogen production.
The establishment of the African Energy Bank is also seen as a way to promote regional integration of Africa’s energy markets.
According to Oramah, the bank will facilitate cross-border investments in energy infrastructure, helping to unlock the potential for regional trade and economic growth.
This will be achieved through initiatives such as the development of regional power pools, interconnections between grids, and the harmonization of regulatory frameworks across Africa’s energy markets.
In addition to financing and regional integration, the African Energy Bank will also support local content development in Africa’s energy sector.
This will be achieved through initiatives such as training and capacity building, research and development, and the promotion of partnerships between local companies and international investors.
According to Oramah, these efforts will help to create new jobs, boost economic growth, and build the skills and expertise needed to sustainably manage Africa’s energy resources.
The announcement of the African Energy Bank has been welcomed by industry leaders and policymakers across Africa.
According to Dr. Nkosazana Dlamini-Zuma, Chairperson of the African Union Commission, “The establishment of the African Energy Bank is a major step forward for Africa’s energy transformation agenda”.