Tinubu approves $100 million investment in African Energy Bank
President Bola Tinubu has approved a $100 million investment by Nigeria for class A shares in the proposed African Energy Bank, the Federal Ministry of Petroleum Resources announced on Friday.
It said the approval now positions Nigeria favorably to win the bid to host the multilateral $5 Africa Energy Bank, which will finance Africa’s hydrocarbon deposits of oil, gas, and condensates and support energy transition and net zero 2060 commitments.
Announcing this in a statement signed by the Permanent Secretary, FMPR, Nicholas Ella, the ministry said, “President Bola Tinubu 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.
“This decision positions Nigeria favorably to win the bid, potentially reshaping the country’s oil and gas ecosystem.”
The ministry further stated that on Friday, the technical inspection team from the African Petroleum Producers Organization and Afrexim Bank, the joint promoters for the establishment of the African Energy Bank, completed their mission to validate Nigeria’s readiness to host the headquarters of the bank, set to be established in July 2024.
Following the first bidding round in early 2024, Nigeria, Ghana, Benin, and Algeria were pre-qualified to proceed to the final round of bidding.
These countries will compete for the right to host the supranational multilateral $5 billion Africa Energy Bank.
“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,” the FMPR stated.
It added, “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 finalising the ratification process. This will ensure that the AEB receives the necessary privileges and immunities to operate in line with its global vision.
“To demonstrate the country’s commitment, 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 application form for land for the permanent headquarters in the Central Business District of Abuja has been submitted for approval.”
The ministry also confirmed that the Federal Government was working diligently with Nigerian National Petroleum Company Limited and the Nigerian Content Development Monitoring Board to meet all eligibility criteria.
“Thus, the $5 billion Africa Energy Bank, when headquartered in Nigeria, shall be the largest single foreign direct investment inflow into Nigeria in over two decades, with its benefits including:
“The Africa Energy Bank ecosystem 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, inclusion, and economic diversification while supporting foreign exchange management strategies,” the ministry stated.
It said the bank would pivot the development exploration and investment initiatives by independent petroleum producers, commercial service providers, legal and local content drivers, and technology and skills development that would leverage the bank’s proximity to the market and scale up production and capacity.
