Nigeria, yesterday, in Abuja, handed over the headquarters of the $5 billion African Energy Bank after 20 months of dramatic and turbulent preparations to keep its promises to other African countries.

The handover of the headquarters, which is one of the most critical hurdles that has delayed the bank, marks the fulfilment of Nigeria’s obligations as the host country.

In July 2024, a competitive bidding process saw Nigeria edge out Ghana, Benin, Algeria, South Africa and Côte d’Ivoire.

Speaking in a short handover ceremony, the Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, said the move closed a chapter of logistical delays that had slowed the bank’s take-off and opened the door to operational decisions, which included board appointments and a formal launch.

With the dwindling funding for fossil fuel and fear that over 120 billion barrels of proven oil reserves and around 18 trillion standard cubic metres of natural gas may become stranded in Africa, the African Petroleum Producers’ Organisation (APPO), in partnership with Afreximbank, pushed for a bank that would provide alternative funding and address the continent’s energy deficit

Lokpobiri said all outstanding issues delaying the bank’s commencement, including the headquarters facility, had now been resolved. He expressed confidence that the bank could begin operations by the end of April, with a formal launch expected no later than June, subject to procedural steps such as shareholder meetings and leadership appointments.

Behind the optimism, sources had told The Guardian that the bank faced a more complex institutional negotiation and geopolitical pressure.

The sources familiar with the process, who pleaded anonymity, acknowledge that disagreements had emerged over where APPO’s raised equity funds should be held pending share allocation. Afreximbank, acting as a development finance institution rather than a commercial bank, had requested that funds be deposited with it.

APPO resisted, insisting the funds remain with Nigerian commercial banks where they were earning interest, unless Afreximbank could match those rates.

The dispute, though described by insiders as minor and now resolved, showed the delicate balance of trust and governance required to birth a new continental bank.

The share capital of the bank is set at $5b, to be subscribed over three years, with an initial $1.5 billion reserved for APPO member countries. Afreximbank has already approved a $1.75 billion investment, a significant endorsement that strengthens the bank’s credibility.

Yet the real test will be whether other African states, many struggling with fiscal stress, can meet their subscription commitments.

While global energy demand is projected to rise by about 24 per cent by 2050, driven by a world economy expected to more than double in size, from $165 trillion in 2023 to $358 trillion, the oil needed for the economy stands at approximately $17.4 trillion by mid-century, about $640 billion yearly in new investment.

With major financing institutions, including the World Bank, now avoiding fossil fuel funding, meeting the demand would remain elusive.