To support energy transition strategies in Africa, the African Export-Import Bank (Afreximbank) and the African Petroleum Producers’ Organization (APPO) have signed a Memorandum of Understanding (MoU) to establish African Energy Transition Bank. The Bank was in support of an African-led energy transition strategy that will boost Africa’s economic development and ensure the progress was compatible with and complementary to, the Sustainable Development Goals. Afrexim said the Bank’s duties include the management and encouragement of such a productive transition, as the APPO member states would be signatories to the Energy Transition Bank’s constitutional documents which would be structured in the form of a multilateral treaty and invest equity into the new vehicle.
Africa stands to experience profound effects from climate change, while the considerable poverty across the continent further disincentivizes a focus on environmental care and sustainability for many populations. Africa’s oil and gas industry faces growing pressures as international investment in hydrocarbons diminishes. While Africa’s transition towards alternative energy sources presents great opportunities for the continent, this transition must be carefully managed to minimize the short-term adverse impacts of the transition while maximizing its longer-term benefits. stablishing the bank would also free human and other resources at Afreximbank that would make it possible to support its member countries more effectively in the transition to cleaner fuels.