In a bid to support energy transition strategies in Africa, the African Export-Import Bank (Afreximbank) and the African Petroleum Producers’ Organization (APPO) have signed a Memorandum of Understanding (MoU) to establish African Energy Transition Bank.
This was disclosed in a statement by the Afreximbank on Friday evening, according to the News Agency of Nigeria.
They disclosed that the African Energy Transition Bank will not only boost Africa’s energy transition goals but will also boost economic development in line with the Sustainable Development Goals.
What they are saying
They revealed that the Bank was in support of an African-led energy transition strategy that will boost Africa’s economic development and also ensure the progress was compatible with and complementary to, the Sustainable Development Goals.
It said the new bank would also ensure compatibility with the continent’s long-term social and environmental objectives as set out in African Union’s Agenda 2063: The Africa We Want.
- “Africa stands to experience profound effects from climate change, while the considerable poverty across the continent further disincentivises a focus on environmental care and sustainability for many populations.
- “Moreover, Africa’s oil and gas industry faces growing pressures as international investment in hydrocarbons diminishes.
- “While Africa’s transition towards alternative energy sources presents great opportunities for the continent, this transition must be carefully managed to minimise the short-term adverse impacts of the transition while maximizing its longer-term benefits,” the statement read in part.
- Afrexim said the Bank’s duties include the management and encouragement of such a productive transition, as the APPO member states would be signatories to the Energy Transition Bank’s constitutional documents which would be structured in the form of a multilateral treaty, and invest equity into the new vehicle.
- Prof. Benedict Oramah, President of Afreximbank, said “We are delighted to be collaborating with APPO towards the establishment of the proposed African Energy Transition Bank
- “These are challenging times when we must strive to strike the right balance between the imperatives of mitigating climate change and the urgency of averting social upheavals as a result of increasingly difficult economic and financial conditions in Africa.
- “For us at Afreximbank, supporting the emergence of the African Energy Transition Bank will enable a more efficient and predictable capital allocation between fossil fuels and renewables.”
He added that establishing the bank would also free human and other resources at Afreximbank that would make it possible to support its member countries more effectively in the transition to cleaner fuels.
What you should know
- Nairametics reported earlier this year, that in a bid to boost Energy transition in Nigeria, the Nigerian National Petroleum Corporation Group announced that it is working with the African Export-Import Bank (AfreximBank) to raise the sum of $5billion to boost its upstream capacity and its energy transition business.