Funding row threatens $5bn Africa Energy Bank launch
CHIGOZIE AMADI
The establishment of the Africa Energy Bank has been thrown into uncertainty as the African Export-Import Bank warned that continued delay by the African Petroleum Producers Organisation in transferring equity subscription funds could stall the project indefinitely, The PUNCH reports.
In a letter to APPO Secretary-General, Dr Omar Farouk Ibrahim, Afreximbank said APPO’s position that funds would only be moved after a launch date, headquarters selection, and appointment of a President risked derailing the bank’s formation.
Farouk had, in June, refused a request by Afreximbank to transfer equity subscription funds to the AEB Equity Investment Account, saying, “On our part, we cannot unilaterally transfer what is in an escrow account that we do not fully control to Afreximbank.
The day we agree on a launch date, after securing the headquarters, and hiring a President, APPO and its member countries shall transfer all the funds in their accounts to the account of AEB.”
However, Afreximbank disagreed with Farouk, saying it was “concerned that this might have been a mistake” because such a stance would mean the bank could not be formally established. The letter, signed by the Executive Vice President, Global Trade Bank, and the executive responsible for delivery of the AEB project, Mr Haytham Elmaayergi, clarified:
“The practical consequence of this position is that we would be unable to proceed with the formal establishment of AEB. The payment of equity subscription funds into the AEB Equity Investment Account, as a deposit toward share subscription, is an absolute condition precedent to establishing AEB. Without the funds being paid into the AEB Equity Investment Account, we will not be able to formally confirm who the shareholders are for share allotment, or whether indeed, there are prospective shareholders.”
Afreximbank stated that without the fund, the first General Meeting cannot be convened, as there would be no pioneer shareholders. Also, “establishment actions set out in the AEB establishment agreement and charter, cannot be taken; board cannot be elected; a President cannot be appointed; and ultimately there would be no Africa Energy Bank.”
In the interest of all institutions and stakeholders in the AEB project, Afreximbank requested compliance with the Establishment Agreement and Charter of AEB to expedite the project’s launch.
It referred APPO to Article 45.1 (a) of the charter which reportedly states that: “Shares corresponding to a nominal value of one billion, two hundred and fifty million ($1,250,000,000) of the initial authorised share capital have been subscribed and paid for in accordance with the provisions of this Charter by at least two ) eligible subscribers.”
Afreximbank stressed that this is a prerequisite step to convening the first General Meeting of Shareholders and proceeding with the election of Directors and appointment of the President and External Auditors. It warned that “The undue delay in transferring investor subscription funds, despite repeated requests, is now creating a reputational risk for all stakeholders involved in this landmark initiative.”
To make the establishment easier, it was said that Afreximbank Board had, in March 2025, amended its approvals to allow the bank to invest up to $750m nominal equity ($300m paid-in), in a matched arrangement with APPO member states.
“The only viable path forward now is the immediate deposit of investor subscriptions into the designated AEB Equity Investment Account to ensure compliance with the Charter and enable the AEB’s establishment activities to commence, without further delay,” Afreximbank advised.
Next step
The letter identified the steps to be taken for the final establishment of the AEB as provided for in Article, stating its proposed completion dates for the expeditious establishment of AEB, to contain the “reputational damage caused by undue” delays.
It urged that all member states which have signed and ratified the establishment agreement deliver their ratification instruments to the provisional depositary — the Executive Secretary of Afreximbank — by July 18, 2025.
It called for the immediate deposit of share subscription funds into the special AEB Equity Investment Account by July 20, 2025, to determine the pioneer shareholders and meet the minimum equity threshold prescribed in the charter. It is advised that by August 29, 2025, the interview process for the appointment of the AEB President should have been completed.
The letter stated that before the first general meeting, Afreximbank and APPO should convene a constituent assembly meeting — tentatively set for August 18, 2025 — for shareholders to receive progress reports, appoint representatives, and nominate candidates for the Board of Directors.
The bank also advised deferring the partitioning and fit-out works at the AEB headquarters in Abuja until the President is appointed, to avoid unnecessary reconfiguration costs.
It said that the inaugural general meeting, targeted for September 18, 2025, would adopt the charter, elect the chairman and vice-chairman, choose the board of directors, appoint the president and external auditors, set the date for the first board meeting, ratify the headquarters location, approve the technical services agreement, and fix an operational launch date.
Afreximbank said the formal launch of the AEB should then follow on or before September 30, 2025. “Please review the charter compliant activities and proposed target dates outlined above and confirm agreement at your earliest convenience. While we remain open to adjustments as needed, establishing this structured framework will enable us to effectively track progress and maintain momentum toward our shared objective, which is the successful and timely launch of the AEB,” Afreximbank stated.
Copies of the letter dated July 10 were sent to Nigeria’s Minister of State for Petroleum Resources, the Minister of Foreign Affairs, Ghana’s Minister of Energy and Green Transition, and Angola’s Minister of Petroleum and Mineral Resources.
The Africa Energy Bank is a multilateral financial institution established under a treaty-based agreement among African member states and governed by a Charter signed by its shareholders. It was created in response to global energy financing constraints and the retreat of international banks from oil and gas projects.
The bank failed to begin operations in March as promised by the Minister of State for Petroleum Resources, Heineken Lokpobiri. In April, APPO announced Nigeria, Angola and Ghana had fulfilled their capital commitments toward establishing the bank. The milestone, it was learnt, represents 44 per cent of the minimum required funding from African Petroleum Producers Organisation members to initiate the bank’s operations.
APPO had requested each of its 18 member states to contribute $83m, targeting a total initial capitalisation of $5bn. In 2024, President Bola Tinubu approved a $100m investment by Nigeria for class A shares in the Africa Energy Bank.
“Beyond Nigeria, Angola and Ghana, five additional member states – Algeria, Benin, the Republic of Congo, Equatorial Guinea and Ivory Coast – have pledged to make their payments, aligning with the bank’s goal to commence operations in the first half of 2025,” Farouk said in April.
However, as the year enters the second half, disagreements between APPO and Afreximbank remain a hindrance. With Farouk set to retire at the end of the year, fears are growing that the much-touted bank for Africa’s energy sector could remain a distant dream unless the two institutions resolve their differences.
Meanwhile, as of the time of filing this report, messages sent to APPO through its website and email address have yet to be replied to.
