President Bola Tinubu has approved a £100 million investment by Nigeria for class A shares in the proposed African Energy Bank, as announced by the Federal Ministry of Petroleum Resources (FMPR) on Friday.
The ministry revealed that this approval now places Nigeria in a favourable position to secure the bid for hosting the multilateral £5 billion Africa Energy Bank. The proposed bank aims to fund Africa’s hydrocarbon reserves of oil, gas, and condensates, while also bolstering efforts towards energy transition and achieving net zero commitments by 2060.
In a statement released by the Permanent Secretary of the FMPR, Nicholas Ella, the ministry disclosed, “President Bola Tinubu has approved a $100m investment from four agencies of the Ministry of Petroleum Resources, exceeding the minimum equity requirement of $83.33m for class A shares.
“This decision positions Nigeria favourably to win the bid, potentially reshaping the country’s oil and gas ecosystem.”
The ministry has verified that a technical inspection team, comprising representatives from the African Petroleum Producers Organisation (APPO) and Afrexim Bank, joint promoters for the establishment of the African Energy Bank, have successfully concluded their assessment to ascertain Nigeria’s preparedness to accommodate the bank’s headquarters. The bank is poised to become operational in July 2024.
Following the initial bidding phase in early 2024, Nigeria, Ghana, Benin, and Algeria emerged as pre-qualified contenders eligible to advance to the final round of bidding. These nations will vie for the opportunity 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.”
It was also disclosed the Nigerian Government is collaborating with the Nigerian National Petroleum Company Limited(NNPCL) and the Nigerian Content Development Monitoring Board (NCDMB) to boost eligibility.
“Thus, the $5bn 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 propel our economic diversification while supporting foreign exchange management strategies,” the ministry stated.
It added that the African Energy Bank will spearhead the development exploration and investment initiatives by independent petroleum producers, commercial service providers, legal and local content drivers and technology and skills development which will take advantage of the bank’s proximity to the market.