Nigeria ready to host Africa Energy Bank – Perm Secretary

The Permanent Secretary in the Ministry of Petroleum Resources, Amb, Nicholas Agbo Ella, has said that Nigeria is ready to host the African Energy Bank.

The Permanent Secretary, who said this when he hosted an inspection team from the African Petroleum Producers Organization (APPO) and Afrexim Bank said that the team’s visit is an indication that the country is fully prepared to host the continents’ energy bank.

In a statement signed by Permanent Secretary in the Ministry, Ambassador Nicholas Agbo Ella, the country has met all the criteria needed to host the Energy Bank.

He said, “Today, the technical inspection team from the African Petroleum Producers Organization (APPO) and AfreximBank – the joint promoters for the Establishment of the African Energy Bank – AEB, completed their mission to validate Nigeria’s readiness to host the headquarters of the African Energy Bank (AEB), 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, which will finance Africa’s hydrocarbon deposits of oil, gas, and condensates and support energy transition and net zero 2060 commitments.

“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.

“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 finalizing the ratification process. This will ensure that the AEB receives the necessary privileges and immunities to operate in line with its global vision.”

Amb. Agbo Ella noted that in order to demonstrate the country’s commitment, a prestigious building in Abuja for the temporary headquarters, just as a secured data room for the technical team’s review.

Headded that the application form for land for the permanent headquarters in the Central Business District of Abuja has been submitted for approval.

“President Bola Ahmed 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 of Petroleum Resources also confirms that Nigeria is working diligently with Nigerian National Petroleum Company Ltd. (NNPCL), and the Nigerian Content Development Monitoring Board (NCDMB), to meet all eligibility criteria,” the Permanent Secretary said.

The $5 billion Africa Energy Bank, when headquartered in Nigeria, shall be the largest single foreign direct investment inflow into the country in 20 years.

Its benefits will include: Being ranked as the 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, and Inclusion, and propel our economic diversification while supporting foreign exchange management strategies; It will pivot the development exploration and investment initiatives by our Independent Petroleum Producers, Commercial service providers, Legal and local content drivers, and technology and skills development that will leverage the bank’s proximity to the market and scale up production and capacity.

Others benefits is that Nigeria’s financial services industry and Capital markets will enjoy streamlined depths and flows for syndication, product development, and asset liquefaction, factoring all relevant services to hydrocarbon markets, positioning Nigeria as the main financial hub for oil and gas downstream, midstream, and upstream investment funding by mitigating the headwinds from climate change and energy transition optics with positive multipliers; The $5 billion AEB is expected to grow its assets to over $120 billion in 7 years, thus becoming a source of sustainable FDI for Nigeria that supports our vision 2030 ambitions, and upon take-off, it is expected to attract an additional $2 billion equity in classes B and C from African Sovereign wealth funds, National oil companies, and other Institutional investors whose investment objectives are aligned with the vision and mission of the bank. Afrexim-Bank board has committed to Invest $1.250 billion, as a major investor in class A shares alongside the APPO members club.