Guardian Nigeria
The African Petroleum Producers Organisation (APPO) and AfreximBank have completed their inspection to validate the preparation of Nigeria for the establishment of the African Energy Bank (AEB).
Ambassador Nicholas Ella, the Permanent Secretary at the Ministry of Petroleum Resources, disclosed this in a statement on Friday.
“Today, the technical inspection team from the African Petroleum Producers Organization (APPO) and Afrexim Bank- the joint promoters for the establishment of the African Energy Bank – AEB, completed their mission to validate Nigeria’s readiness to host the headquarters of the African Energy Bank (AEB), set to be established in July 2024,” the statement reads.
According to Ella, following the first bidding round in early 2024, Nigeria, Ghana, Benin, and Algeria were pre-qualified to proceed to the final round of bidding.
Ella disclosed that these countries will compete for the right to host the supranational multilateral $5 billion Africa Energy Bank, which will finance Africa’s hydrocarbon deposits of oil, gas and condensates and support energy transition and net zero 2060 commitments.
“In our preparation for the bid, the Ministry of Petroleum Resources sought and obtained expert opinions from the Federal Ministry of Justice and consultants in January 2024.
“They reviewed and approved the bank’s proposed Charter, Establishment Agreement, “The Treaty,” and Headquarters Host Agreement. This approval provided the impetus to proceed, and the Federal Executive Council and National Assembly are currently finalizing the ratification process. This will ensure that the AEB receives the necessary privileges and immunities to operate in line with its global vision.”
He added that Nigeria has identified a prestigious building in Abuja for the temporary headquarters and opened a secured data room for the technical team’s review.
The Permanent Secretary also disclosed that the application form for land for the permanent headquarters in the Central Business District of Abuja has been submitted for approval.
President Bola Ahmed Tinubu, according to him, has approved a $100 million investment from four Agencies of the Ministry of Petroleum Resources, exceeding the minimum equity requirement of $83.33 million for class A shares.
The Ministry of Petroleum Resources also confirms that Nigeria is working diligently with Nigerian National Petroleum Company Ltd. (NNPCL), and the Nigerian Content Development Monitoring Board (NCDMB), to meet all eligibility criteria.
Thus, the $5 billion Africa Energy Bank, when headquartered in Nigeria, will be the largest single foreign direct investment inflow into Nigeria in over two decades.
The benefits include; “the Africa Energy Bank eco system shall rank as the third largest Bank in Africa and shall be the most prominent bank in Nigeria in terms of shareholders’ funds.
“ It will significantly boost Nigeria’s Gross Domestic Product, Employment, Financial Architecture and Inclusion, and propel our economic diversification while supporting foreign exchange management strategies.
”It will pivot the development exploration and investment initiatives by our Independent Petroleum Producers, Commercial service providers, Legal, Local content drivers and technology and skills development that will leverage the bank’s proximity to market and scale up production and capacity.
”Our financial services industry and Capital markets will enjoy streamlined depths and flows for syndication, product development and asset liquefaction, factoring all relevant services to hydrocarbon markets, positioning Nigeria as the main financial hub for oil and gas downstream, midstream and upstream investment funding by mitigating the headwinds from climate change and energy transition optics with positive multipliers.”
Ella also stated that the $5 billion AEB is expected to grow its assets to over $120 billion in 7 years.
“The African Energy Bank, upon take-off, is expected to attract an additional $2 billion in equity in classes B and C from African sovereign wealth funds, national oil companies and other institutional investors whose investment objectives are aligned with the vision and mission of the bank.
“AfreximBank board has committed to Invest $1.250 Billion, as a major investor in class A shares alongside the APPO members club.”
