African Energy Bank moves to close continent’s $50bn energy finance gap

The African Petroleum Producers’ Organization (APPO) and the African Export-Import Bank (Afreximbank) have announced significant progress in setting up the $5 billion Africa Energy Bank, a landmark initiative aimed at tackling the continent’s chronic energy financing shortfall.

The update was shared on Monday in Cape Town during African Energy Week (AEW): Invest in African Energies, at a workshop titled Africa Energy Bank Take-Off – Bridging the Financing Gap for Africa’s Energy Sector.

Dr. Omar Farouk Ibrahim, Secretary General of APPO, said the bank had “succeeded in raising a large chunk of the funds” needed to launch the institution, describing the progress as unprecedented for a development bank.

“In the last two to three years, we have achieved what no other development bank has in terms of the timeline,” Ibrahim said.

He noted that despite being resource-rich, Africa still grapples with widespread energy poverty.

“More than 600 million Africans lack electricity… yet we export 75% of our oil production and 45% of gas,” he said. “If we want energy for our people, then we have to fund the projects. We have a duty to ensure the African continent is not left behind in terms of energy access.”

Haytham El Maayergi, Executive Vice President of Afreximbank, highlighted the financing barriers African countries face.

“Africa is being penalized – we pay more per kilowatt before subsidies than anywhere in the world, because the costs of financing energy projects are higher. When we borrow, we pay more because our credit ratings are not as high. It’s a toll on Africa,” he said.

Figures presented at the workshop underscored the scale of the challenge. Africa receives only 4% of global climate investment, while the continent will require between $1.6 trillion and $1.9 trillion by 2030 to transition from fossil fuels. The annual energy financing gap is currently estimated at $31 billion to $50 billion.

With fossil fuels still accounting for between 35% and 82% of government revenues in some countries, officials stressed that closing the financing gap is critical not only for energy access but also for long-term economic stability and development.

The Africa Energy Bank, once operational, is expected to serve as a homegrown financing solution to drive energy projects across the continent, reduce reliance on external lenders, and strengthen Africa’s capacity to define its energy future.