June 19, 2024

‘How Nigeria’s economy will reap from $5bn AEB’

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Ilenre Irele

The Ministry of Petroleum Resources has said that the African Energy Bank (AEB), to be located in Abuja, would bolster the country’s Gross Domestic Product (GDP), propel economic diversification and support Nigeria’s foreign exchange management strategies.

In a statement in Abuja, Permanent Secretary of the Ministry of Petroleum, Ambassador Nicholas Ella, stated that with a proposed capital of $5 billion and projected assets of $120 billion in seven years, the AEB would become a source of sustainable foreign direct investment (FDI) for Nigeria.

He added that with the proposed capital base and projected assets, the AEB would rank as the third largest bank in Africa and emerge as the largest bank in Nigeria in terms of shareholders’ funds.

He said: “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.

“Our 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.”

Ella added that upon take-off, the African Energy Bank 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.

He added that already, Afrexim-Bank Board had committed to invest $1.250 billion, as a major investor in class A shares alongside the African Petroleum Producers’ Organisation (APPO) members club.

The permanent secretary of the petroleum ministry explained that in demonstration of its commitment to the project, the Federal Government had identified a prestigious building in Abuja for the temporary headquarters of the bank, and also opened a secured data room for the technical team’s review.

He said the application form for land for the permanent headquarters in the Central Business District of Abuja has been submitted for approval, while President Bola Ahmed Tinubu had 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.

According to him, this decision positions Nigeria favourably to win the bid, potentially reshaping the country’s oil and gas ecosystem.

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