Africa is struggling to fund its burgeoning oil and gas resources as climate change activism has dried up finance from global multilateral finance institutions, so an Africa Energy Bank is close to being formed to help deal with this crisis, Dr Omar Farouk Ibrahim, secretary general of the African Petroleum Producers Organisation (APPO) said yesterday.
Ibrahim said at the African Oil Week 2024 conference in Cape Town that establishment documents and agreements had been signed and reached between APPO and the Afreximbank in June, this after “good progress” had been made to establish the bank over the two and half years since it was first mooted.
He said critics had initially argued that there was no funding to establish such a bank for the continent, and that it was unlikely to succeed, but 45% of the bank’s estimated $5 billion founding capital had been funded by APPO member-countries even before the founding agreements were signed.
The bank would be head-quartered in Abuja, Nigeria. APPO’s 18 member countries are Algeria, Angola, Benin, Cameroon, Chad, Congo, DR Congo, Côte d’Ivoire, Egypt, Ghana, Equatorial Guinea, Gabon, Libya, Namibia, Niger, Nigeria, Senegal and South Africa.
Ibrahim said it was impossible for African countries to develop without using their oil and gas resources, and because developed countries were the main contributors to existing levels of greenhouse gas emissions, they had the technology, and should be asked to reduce the level of these emissions, rather than demand that emerging countries help pay for a global energy transition.
He said APPO had also recently partnered with the Central African Business Forum to promote one of the continent’s most ambitious projects, the East Africa Crude Oil Pipeline (EACOP), which when completed, would help to revitalise 11 African countries.
Uganda Minister of Energy and Minerals, Ruth Nankabirwa Ssentamu said the discovery of oil, of up to 230 000 barrels per day at peak production for at least the first five years out of the 25 years estimated life span of the existing finds, in Uganda, had resulted in a great number of new investment opportunities, but many of these projects were being delayed by lack of funding capacity and investment.
This was while progress towards oil production, the drilling of wells and the construction of a central production processing facility were all underway. Some of the new investment opportunities included the start of construction of the 1 443km EACOP, which she said the funding of which had been needlessly maligned by environmental activists.
She said there were already 500km of pipes in Uganda, and contrary to environmentalists who claimed that the heated pipeline posed danger for communities and the environment, the pipes had three layers, would be buried deep, and had insulation to prevent the pipeline from affecting the surrounding environment.
Among the other initial developments that were planned and being constructed following the discovery of oil was a second international airport at Hoima, which would also boost the tourism industry, a commercial fuel storage facility, a fuels refinery and an associated large industrial park.
Ghana’s Minister of Energy, Dr. Matthew Opoku Prempeh said regional cooperation was essential in the sector.
“Regional co-operation has a huge role to play in Ghana’s energy vision in that our plans include exporting energy to other parts of the continent,” Prempeh said.
However, he said countries needed to work to remove trade barriers and develop shared infrastructure, such as pipelines and refineries, to maximise the benefits of energy resources.
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