The newly operational African Energy Bank is mobilizing substantial capital to finance strategic energy projects across the continent, with Nigeria, Angola, and Libya positioned as key beneficiaries as the institution works toward its ambitious $120 billion asset target over the next five years.

The AEB is projected to grow to $120bn in five years time, following its January 2025 launch in Abuja with an initial capitalization of $5 billion.

The three oil-rich nations represent critical markets for the bank’s mission to bridge Africa’s energy financing gap as Western financial institutions increasingly withdraw support for fossil fuel projects due to environmental concerns.

Nigeria, sub-Saharan Africa’s largest oil producer, has seen recent major commitments including TotalEnergies’ $550 million Ubeta Gas Field Development and Shell’s $5 billion Bonga North Project. However, additional financing remains crucial to advancing the country’s gas agenda and unlocking its full potential in the energy transition.

Angola is actively diversifying its energy portfolio while advancing major deepwater developments. Angola is spearheading its first non-associated gas project, the New Gas Consortium, and undertaking a $12 billion expansion of the Angola LNG plant to enhance its gas monetization efforts. The country also plans to make a final investment decision on its first green hydrogen project in 2025.

Libya, despite years of political instability, remains a key player in African energy. Libya’s NC98 Block development led by Waha Oil Company represents a $7.6 billion net present value project targeting start-up before 2030, with production slated to reach 80,000 barrels per day of condensate and oil by July 2028.

Each country has pledged $83m and to raise a total amount of $1.5bn. That will be complemented by $14bn from the Afreximbank, a trade credit organization.

Nigeria’s Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, disclosed in July that the $5bn will increase to $120 billion in the next three to five years, highlighting the bank’s growth trajectory.

The bank’s establishment addresses a critical need in African energy financing. Africa’s energy shortages are a “development constraint”. Africa’s subdued power sector limits the production of fertiliser, steel and cement – hallmarks of economic development.

ALSO READ: N748bn impairment slashes First HoldCo annual profit

Nigeria, Angola and Ghana have fulfilled their capital commitments toward establishing the Africa Energy Bank. This milestone represents 44% of the minimum required funding from African Petroleum Producers Organization members to initiate the bank’s operations.

Beyond these three nations, Algeria, Benin, the Republic of Congo, Equatorial Guinea and Ivory Coast have also pledged their contributions to the 18-member African Petroleum Producers Organisation initiative.

The African Energy Chamber, an advocacy group, has also argued that Africa has a “sovereign right” to develop its natural resources, which, according to the group, includes 125 billion barrels of oil and 620 trillion cubic feet of natural gas.

APPO Secretary-General Ibrahim announced, “By making this choice, Africa is deciding, not to go as a propitiatory victim to the altar of the energy transition, but to take its destiny into its own hands, prioritising the destiny of the nearly one billion or so Africans who have no access to any form of modern energy”.

The AEB officially launched in January 2025 from its headquarters in Abuja, Nigeria. Nigeria’s Federal Executive Council on 25 June 2024, “approved the hosting of the Bank,” with the country winning the hosting right after competing with Ghana, Algeria, South Africa, and Benin Republic.

The bank represents a collaborative effort between the African Petroleum Producers Organisation and Afreximbank to create a financial institution dedicated to Africa’s unique energy needs, offering tailored financing solutions expected to accelerate energy project development, enhance energy security, and drive economic growth across the continent.

As Africa seeks to industrialize while nearly one billion people lack access to modern energy, the African Energy Bank positions itself as a critical instrument for financing the continent’s energy future on its own terms.