After repeated delays, the Africa Energy Bank (AEB) was officially launched this week – tasked with financing oil and gas projects across the continent as global lenders retreat from such investments due to climate concerns. Even as the world aims to transition away from fossil fuels, many African leaders have made clear they want to continue exploring and extracting the continent’s large oil and gas deposits – estimated at about 125 billion barrels of crude and more than 600 trillion cubic feet of gas – to fund economic development. ‘The creation of the Africa Energy Bank reaffirms African governments’ determination to secure their own energy future,’ said a statement announcing the institution’s launch at a meeting in Abuja, adding that the bank’s founders believed oil and gas remained vital to the continent’s energy systems. The delays to the bank’s launch had raised questions about its momentum and whether it could mobilise investment to finance major African hydrocarbons initiatives in an era of energy transition. The initial plan for the energy bank – a joint initiative of the African Petroleum Producers’ Organization (APPO) and the African Export-Import Bank (Afreximbank) – was to start operations in January 2025, but the bank’s opening was repeatedly pushed back. Quest for investment The bank said it had authorised capital of $5 billion but did not disclose how much of that had been subscribed or paid in by shareholders. It vowed to focus on projects that would help strengthen productive capacity, reduce reliance on imported fuels and promote trade in energy goods across the continent. 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However, its backers said at the weekend launch that the bank would seek investment from governments, national oil companies, financial institutions and private investors across the continent to ensure that ‘Africa’s energy future is shaped by Africans’. African-led approach to energy financing Backers said the bank was needed because many traditional international lenders have curtailed financing for oil and gas projects, potentially hindering a more extended and gradual energy transition advocated by many African leaders as a way to ensure economic and social development. Chantal Naidoo, executive director at Rabia – a South Africa-based just transition think-tank – said the creation of a bank to invest in fossil fuel projects reflected the complexities of switching to clean energy for African countries – noting the high cost of financing for clean energy projects. Africa wants adaptation finance on COP31 agenda, raising risk of a fight At the same time, Naidoo said, the continent is expected to transition within a global system in which the rules are not applied equally – citing recent support for continued oil and gas development by the British and Norwegian governments. ‘A binary choice between fossil fuels and renewables does little to address these complexities,’ Naidoo said. ‘Momentum lies with renewables’ But many climate campaigners say the bank should prioritise renewable energy investment as Africa builds out much of its energy system for the first time, fueling growth in solar power. Data from energy think-tank Ember, published in August, projects that the continent will install a record 17 gigawatts (GW) of solar capacity in 2026 – equal to about 100,000 solar panels every day. This would mark the third consecutive year of record growth, following increases of 51% in 2025 and 25% in 2024. African governments strengthen waste rules as solar and battery use surges Joseph Ibrahim, Nigeria campaign director for Secure Energy Project, a global advocacy organisation working to accelerate the energy transition, said Africa receives only about 2% of global clean energy spending, leaving plenty of scope for more. ‘A new African energy bank should build on that momentum, not pull scarce public money away from it,’ Ibrahim said. The post Africa launches long-delayed energy bank to finance fossil fuel projects appeared first on Climate Home News.