Africa Energy Bank’s planned launch postponed once more, denting regional oil and gas ambitions

KUALA LUMPUR, 11 OCTOBER 2026 —

Africa Energy Bank’s Latest Delay Deepens Doubts Over Fossil Fuel Financing Amid Global Transition

The delay comes as African nations, despite their collective pushback against global fossil fuel phase-out proposals, face mounting challenges in mobilising financing for their vast oil and gas reserves—estimated at 125 billion barrels of crude and over 600 trillion cubic feet of gas. While leaders insist these resources remain essential for development, the AEB’s faltering progress reflects broader tensions between Africa’s energy ambitions and the shrinking appetite of international financiers for hydrocarbon projects.

From Vision to Stalled Reality: The Bank’s Checkered Timeline Originally planned for January 2025, the AEB’s launch has been pushed back six times, with Nigeria—its designated host—delaying construction of its Abuja headquarters until late 2025. After the government announced the offices’ completion in November 2025, the bank’s operational start was rescheduled to January 2026, then April, June, and September before landing on November.

The repeated postponements have sparked scepticism among industry experts, who warn that the institution risks losing momentum before it even begins.

The bank’s creation was formalised in 2022 at the African Petroleum Producers’ Organization (APPO) summit in Angola, where ministers adopted a resolution to establish a financing mechanism for oil, gas, and broader energy projects. APPO’s website frames the bank as a response to Western disenchantment with fossil fuels, arguing that while developed nations can afford to transition away from hydrocarbons, Africa—where many economies still rely on oil and gas revenues—cannot.

The bank’s stated objectives include financing exploration, production, and refining of hydrocarbons while also supporting a transition to cleaner energy—though critics question whether its primary focus remains on fossil fuels.

Financing Gap and the Challenge of Self-Funding The AEB’s $5 billion base capital target, with plans to scale to $120 billion within five years, hinges on contributions from 18 APPO member states, each pledged to inject $83 million for a combined $1.5 billion in equity. The remaining $3.5 billion was expected to come from Afreximbank, non-APPO African nations, and external investors. However, even the initial $500 million seed capital—meant to launch operations—has proven elusive.

In May 2026, APPO Secretary-General Farid Ghezali urged members to fulfil their pledges by June, but the delays suggest these commitments may not have been met. Industry analysts attribute the funding struggles to Africa’s $30 billion–$45 billion annual energy financing gap, exacerbated by the withdrawal of Western lenders, export credit agencies, and insurers from African hydrocarbons since 2020.

Oil majors like Shell have also been divesting African assets, leaving smaller local operators—whose credit ratings are insufficient for cheap borrowing—to fend for themselves.

Baron Lamarré, a former Petronas oil trader and energy expert, described the financing hurdles as "brutally hard" without the involvement of major oil companies and their financing networks. "Missing three deadlines in a row is not normal," he said. "If the timeline slips again, the story flips from ‘ambitious institution finding its footing’ to ‘good idea that lost momentum before it found any.’"

Regional Energy Projects Hang in the Balance Despite the AEB’s struggles, Africa’s oil and gas ambitions remain robust. Major projects under development—such as the 1,443-kilometre East African Crude Oil Pipeline (EACOP) and Dangote’s 700,000-barrel-per-day Kenyan refinery—demonstrate the continent’s commitment to hydrocarbons as a cornerstone of energy security. At last year’s UN COP30 climate talks, African nations collectively opposed a global fossil fuel phase-out roadmap, though some supported the proposal individually.

The bank’s delays come as Africa’s investment landscape shifts. While foreign direct investment (FDI) dropped from a 2024 peak, inflows in 2025 remained roughly one-third above the continent’s long-term average, according to the UNCTAD 2026 World Investment Report. However, these investments are increasingly concentrated in critical minerals for renewable energy, battery manufacturing, and advanced industrial production—sectors that offer little direct support for oil and gas expansion.

Expert Divide: Teething Troubles or Fatal Flaws? Industry insiders offer mixed assessments of the AEB’s prospects. Said Addi, a former Shell and Gunvor executive, argued that if the bank eventually secures capital and delivers commercially viable projects, the delays may be seen as "normal teething troubles" for a multilateral institution. However, he acknowledged that "scepticism will be justified if it continues to stall."

Lamarré, however, remains sceptical. "Raising the first $500 million of seed capital has taken this long—that’s the clearest signal yet of how steep the climb to $120 billion looks," he said. He noted that while China and Gulf investors have partially filled the financing void left by Western players, their capital cannot match the volume, tenor, or pricing previously offered.

Climate Campaigners and the Bank’s Controversial Mandate While the AEB frames itself as supporting both fossil fuels and energy transition, critics argue its primary focus on hydrocarbon financing contradicts global climate goals. The bank’s dual mandate—financing oil and gas while promoting energy security—has drawn scrutiny, particularly as fossil fuel investment in Africa has declined over the past decade, according to the International Energy Agency (IEA).

The repeated delays and funding challenges suggest that without a major shift in global financing trends—or a sudden influx of capital from unconventional sources—the AEB may struggle to fulfil its mission. For now, Africa’s oil and gas sector remains in limbo, caught between the continent’s development needs and the world’s accelerating energy transition.

The next critical test for the AEB will be whether it can secure its $500 million seed capital by November, or if further postponements will signal the beginning of the end for the bank’s ambitious—but so far, unrealised—vision.