African lenders have launched a $5 billion energy bank focused on oil and gas projects, as the continent tries to break its costly dependence on fuel imports and the bank aims to bridge a financing gap as Western lenders retreat from financing fossil fuel projects.
The launch comes as African countries have been hit hard by surging global energy prices this year, which have strained public coffers and prompted several to announce plans to develop new oil and gas fields or build domestic refineries. The planned wave of new projects arrives as debt costs and infrastructure spending needs rise.
The continent requires an estimated $200 billion annually in energy investment, according to the African Export-Import Bank and the African Petroleum Producers' Organisation. The new bank aims to bridge a financing gap as many major Western lenders retreat from financing fossil fuel projects, despite oil and gas remaining central to the continent's energy systems. It will support projects across the energy value chain, including exploration and production, as well as refining and distribution.
"Africa Energy Bank reaffirms African governments' determination to secure their own energy future," the bank's leaders said.
Analysis
Why This Matters
- The bank responds to the financial strain that surging global energy prices have put on African economies, many of which depend on imported fuel.
- It marks a push by African governments to finance their own oil and gas projects as major Western lenders retreat from fossil fuel financing.
- The $5 billion pool is small against the estimated $200 billion annual investment need, leaving a large financing gap.
Background
Africa's energy systems remain heavily reliant on oil and gas, and the continent has been hit hard by high global energy prices. The launch comes amid rising debt costs and growing infrastructure spending needs, with many Western lenders retreating from fossil fuel projects.
What to Watch
- Whether the bank can attract enough capital to make a meaningful contribution to the estimated $200 billion annual energy investment need.
- Which oil and gas projects, refineries or distribution networks receive the first financing.
- Whether more Western lenders follow the retreat from fossil fuel financing, widening the gap the bank aims to fill.
Checked
10 claims in this story checked against 1 source: 10 supported.
Show each claim
- SupportedAfrican lenders launched a $5 billion energy bank focused on oil and gas projects.Semafor: “African lenders launched a $5 billion energy bank focused on oil and gas projects”
- SupportedThe new institution aims to bridge a financing gap as Western lenders retreat from financing fossil fuel projects.Semafor: “The new bank aims to bridge a financing gap as many major Western lenders retreat from financing fossil fuel projects”
- SupportedThe continent is trying to break its costly dependence on fuel imports.Semafor: “as the continent tries to break its costly dependence on fuel imports”
- SupportedAfrican countries have been hit hard by surging global energy prices this year, straining public coffers.Semafor: “African countries have been hit hard by surging global energy prices this year, which have strained public coffers”
- SupportedSurging energy prices prompted several countries to announce plans for new oil and gas fields or domestic refineries.Semafor: “prompted several to announce plans to develop new oil and gas fields or build domestic refineries”
- SupportedThe planned wave of projects comes as debt costs and infrastructure spending needs rise.Semafor: “the planned wave of new projects comes as debt costs — and infrastructure spending needs — are on the rise.”
- SupportedThe continent requires an estimated $200 billion annually in energy investment, according to Afreximbank and the African Petroleum Producers’ Organisation.Semafor: “The continent requires an estimated $200 billion annually in energy investment, according to the African Export-Import Bank and the African Petroleum Producers’ Organisation.”
- SupportedOil and gas remain central to the continent’s energy systems.Semafor: “despite oil and gas remaining central to the continent’s energy systems.”
- SupportedThe bank will support projects across the energy value chain, including exploration and production, refining and distribution.Semafor: “It will support projects across the energy value chain, including exploration and production, as well as refining and distribution.”
- SupportedThe bank’s leaders said, “Africa Energy Bank reaffirms African governments' determination to secure their own energy future.”Semafor: “The “Africa Energy Bank reaffirms African governments’ determination to secure their own energy future ,” the bank’s leaders said.”