The African Petroleum Producers’ Organisation (APPO) - establish an African Energy (Fossil Fuel) Bank

(Photo: Extinction Rebellion Cape Town/Twitter)

The last COP in Dubai concluded with the global stocktaking text that included a tripling of renewable energy and a doubling of energy efficiency improvements globally by 2030.  It also included an unprecedented commitment to “transition away from fossil fuels”.

Meanwhile, this week the African Petroleum Producers’ Organisation (APPO), an association of African petroleum-producing countries, announced Nigeria would host the newly created Africa Energy Bank (AEB).

This bank has been set up to support the development of fossil fuel projects in Africa. It has an initial share capital of $5bn and it says it will fund not only fossil fuel expansion but also renewable energy.

APPO has a strong partnership with OPEC which will support its efforts to expand Africa’s oil and gas. In Sharm El Shiekh at COP27 (2022) several African Civil Society organizations including Oilwatch Africa, Stop EACOP, Africa Coal Network and Urgewald released a report on Who is financing Fossil Fuel Expansionin Africa. The report identified 200 copies and said that these companies have expansion projects in 44 of 55 countries. According to the NGO report, 72% of the banks supporting fossil fuel developers in Africa came from banks that are members of the “Net Zero Banking Alliance”.

This report did have an impact and developed country banks are under scrutiny from their shareholders and stakeholders to show commitment to net-Zero with their investments

The establishment of the African Energy Bank is the beginning of an intended alliance of African Banks – some 700 potential partners, the Bank seeing more hesitation on funding from developed countries' banks is seeking to mobilise African funding.  

In April at the Spring Meetings of the World Bank there had been unsuccessful pressure to move the Bank’s funding from oil and gas significantly to financing renewables in Africa.

“If the World Bank maintains its stance on gas, it risks perpetuating a neocolonial narrative by anchoring Africa in a fossil fuel-dependent development model that binds the continent to poverty and environmental degradation. This approach not only stifles Africa's potential to harness its vast renewable resources for clean, affordable energy but also obstructs a path toward sustainable and equitable prosperity. Africa must leverage its renewable energy capacities to foster genuine development that benefits all.” DeanBhekumuzi Bhebhe (Common Dreams)

How all this will be reflected in the New National Determined Contributions made by  African countries in February 2025 under the Paris Climate Agreement is unclear. How the Bank can continue on one Hand to be playing a role as the bank for the Loss and Damage Fund and at the same time support fossil fuel development not only in Africa but concerning this article in Africa is a problem. The Bank needs a transition plan to support any fossil fuel development. Perhaps COP29 offers the chance for them to explain how they might do that.