BY MADUABUCHI EFEGADI
African Export-Import Bank (Afreximbank), the African multilateral trade bank, and the African Petroleum Producers’ Organisation (APPO) have signed a memorandum of understanding (MoU) to establish an African Energy Transition Bank (AETB), to drive an Africa-led energy transition strategy that is consistent with the goal of preserving the environment and livelihoods.
The energy bank is in support of an African-led energy transition strategy. The new institution would accelerate Africa’s economic development and ensure that the progress was compatible with and complementary to the UN-powered Sustainable Development Goals (SDGs) for the continent.
Also, the incoming bank would also ensure compatibility with Africa’s long-term social and environmental objectives as set out in the African Union’s Agenda 2063: The Africa We Want.
“While Africa’s transition towards alternative energy sources presents great opportunities for the continent, this transition must be carefully managed to minimise the short-term adverse impacts of the transition while maximising its longer-term benefits,” the agreement said.
The new bank’s responsibilities would include the management and encouragement of such a productive transition, acknowledging the impact of climate change on Africa, and being aware that poverty fosters accelerated environmental degradation, and acknowledging the need for an orderly and just transition that protects the environment and enhances living standards.
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.
Afreximbank would co-invest and advise on the establishment and implementation process.