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Home Energy Energy-General Haley Zaremba Haley Zaremba is an energy journalist and researcher with more than a decade of professional experience covering global energy systems, land and natural resources, and... More Info Set us as your preferred Google source Premium Content By Haley Zaremba - Nov 03, 2026, 4:00 PM CST The new $5 billion Africa Energy Bank, created by Afreximbank and APPO, will finance oil and gas projects as international lenders pull back. Oil and gas investment in Africa fell from $68 billion in 2016 to about $37 billion in 2025, while IPPG puts the continent's annual need at $200 billion.
S&P Global says the bottleneck is turning investor appetite into bankable projects, and $5 billion covers only a sliver of the gap. Africa needs $200 billion in annual energy investment, according to the Independent Petroleum Producers Group (IPPG). Around 600 million people across Africa lack access to electricity, a problem that could quickly intensify as sub-Saharan Africa rapidly grows, develops, and industrializes.
The region’s energy demand is expected to increase threefold over the next decade, as emerging economies develop and the population continues to boom. But Western investors are pulling out of the continent right when funding is most needed. To fill this gap, a brand new $5 billion financial institution, the Africa Energy Bank, has been established by the African Export-Import Bank (Afreximbank) and the African Petroleum Producers' Organisation (APPO) to finance oil and gas projects across Africa.
“The establishment follows years of efforts by Afreximbank and APPO to create an African-led financing institution capable of supporting energy projects that have struggled to attract funding from international lenders,” Business Insider Africa reported earlier this week. “This comes as oil and gas investment in Africa fell from $68 billion in 2016 to about $37 billion in 2025.” Africa is caught in the middle of an energy trilemma . The continent’s population is on track to double between now and 2050 – by midcentury one in four people in the world will be in sub-Saharan Africa.
Meeting projected demand will require power generation capacity to increase ten-fold by 2065 , according to figures from the European Commission’s Joint Research Centre. The underresourced continent has to find a way to manage its energy production and imports in a way that balances energy that is simultaneously reliable, affordable, and sustainable. In order to achieve its energy needs while also meeting global climate goals, Africa has been tasked with the difficult imperative of ‘ leapfrogging ’ over fossil fuel development straight into the buildout of clean energy resources – but African leaders are torn about this imperative, and for now “oil and gas [remain] central to the continent's energy systems despite the global shift towards cleaner energy sources,” according to Business Insider Africa.
Africa has enormous natural resources to support the development of both clean energy projects as well as oil and gas projects. The problem is funding. Africa is home to 60 percent of the world’s best solar power potential, but just 1% of installed solar power production capacity.
As part of legally binding global climate pledges, the world’s wealthiest nations had promised to channel $100 billion per year to the world’s poorest nations – most of which are in Africa – to help them decarbonize, including by building up much-needed clean energy sectors, but that money never materialized . While private capital has long had its eye on the African energy sector, development has been slow and piecemeal. “As energy demand accelerates and investment along energy supply chains fails to keep pace, the continent faces a stark challenge,” S&P Global wrote in a March ‘ thought leadership report ’.
“It must transform abundant investment appetite into bankable, financeable projects, or risk deepening energy poverty and lost economic potential." This is where the Africa Energy Bank could make a difference. As foreign investment dries up, the African-backed financial institution aims to keep the continent’s energy security ambitions alive and within reach – although $5 billion is a far cry from the hundreds of billions that the continent needs to keep up with energy demand growth. “With a limited pool of capital available, only the most bankable initiatives advance, forcing hard prioritization and sidelining many projects that are economically viable and socially desirable,” S&P went on to report.
While the initial pool of funding is relatively small, the provision of funding from local sources, and directed toward local resource development, is a significant and positive occurrence for the resource-rich, cash-poor continent. By Haley Zaremba for Oilprice.com More Top Reads From Oilprice.com Dubai Benchmark Slips Into Contango for the First Time Since July IEA Warns Global Gas Crunch Could Last Well into 2027 Brazil's Data Center Push Hinges on Gas Rules, Grid Access and a New Congress Download The Free Oilprice App Today Back to homepage Haley Zaremba Haley Zaremba is an energy journalist and researcher with more than a decade of professional experience covering global energy systems, land and natural resources, and... More Info Leave a comment EXXON Mobil -0.35 Open 57.81 Trading Vol. 6.96M Previous Vol. 241.7B BUY 57.15 Sell 57.00 "
