With nearly 600 million people in sub-Saharan Africa still without access to electricity in 2030, a fundamental obstacle to its economic and human development, the creation of the African Energy Bank (AEB) is emerging as a strategic and bold response to this persistent crisis. Against a backdrop of tension between development emergencies and global climate imperatives, this new pan-African institution has set itself the task of filling an estimated annual funding gap of $25 billion to achieve universal access to energy.
The lack of reliable energy affects all aspects of daily life. Children cannot study after sunset without light, businesses see their productivity plummet without a stable electricity supply, and the industrialization of an entire nation is compromised. In the most dramatic cases, a power outage can turn a simple technical malfunction, such as the failure of a refrigerator in a health clinic, into a major health crisis. These examples illustrate the interdependence of energy challenges with health, education, and economic growth.
However, Africa finds itself at a historic crossroads. Recent massive discoveries of oil and gas, among the largest in the world, offer a unique opportunity to secure energy supplies, reduce costs for households and businesses, and ensure affordable prices for all. It is in this context that the African Energy Bank (AEB) is emerging as a flagship institution, no longer just an ambition, but a vital necessity for the future of the continent.
Created to navigate financial complexities and balance urgent development needs with global climate imperatives, the EBRD has set itself an ambitious goal: to mobilize $25 billion per year to achieve universal access to energy by 2030. Its funding priorities aim for a balance tailored to African realities, leveraging vast fossil fuel resources for immediate energy security while accelerating the adoption of renewable energy (solar, wind, hydro, and geothermal) and considering nuclear as a complement.
The goal is clear: to build diversified and resilient energy systems capable of meeting economic and social needs, creating jobs, and improving living conditions. This involves not only investments in production, but also in transportation and distribution infrastructure to connect urban, industrial, and rural areas.
A major obstacle lies in the global divestment from fossil fuels. Western institutions and traditional financiers are gradually withdrawing from these sectors, complicating the BAE's mandate, which includes financing short- and medium-term oil and gas projects to meet immediate demand.
To overcome this, the BAE is adopting a multifaceted strategy. First, it defends Africa's moral imperative: with a historically minimal contribution to global emissions, the continent must exploit its resources for its own development. Natural gas is presented as an essential transition fuel for industrialization, rather than a long-term dependency. Second, diversifying funding sources is a priority, seeking capital from non-traditional partners and maintaining a nuanced dialogue with Western institutions that are sensitive to Africa's unique trajectory. Finally, the BAE advocates for differentiated approaches, recognizing that Africa's energy transition cannot mirror that of developed countries, requiring continued investment in hydrocarbons to support sustainable economic growth and finance renewables.
African energy projects are often viewed as risky by international investors due to political instability, regulatory uncertainty, currency volatility, and demand volatility. This raises the cost of capital and discourages investment.
To overcome these obstacles, the African Energy Bank will need to deploy a multidimensional and innovative financial strategy. First, robust advocacy for a differentiated African transition will be essential. The Bank will need to forcefully defend Africa's legitimate right to use its natural resources for economic development, highlighting its historically negligible contribution to global emissions. In this vein, natural gas will be presented not as a long-term dependency, but as a crucial transition energy to ensure energy security and support industrialization.
At the same time, aggressive diversification of capital sources is imperative. This will involve actively targeting non-traditional partners, such as sovereign wealth funds and private capital, as well as countries less subject to pressure to divest from fossil fuels. This approach must be accompanied by ongoing dialogue with Western institutions that are open to a more nuanced and pragmatic view of the continent's unique energy transition.
To attract these investments, the BAE will need to implement robust mitigation measures for perceived risks. This will involve deploying a range of financial tools, including risk guarantees, hedging instruments against currency fluctuations, and blended finance structures. Its role as a provider of seed capital (catalyst equity) during the riskiest phases of project development will also be key to improving their bankability and reassuring international investors.
Beyond international financing, mobilizing local capital will be a top priority. A key part of the strategy will be to channel African savings, particularly through pension funds and sovereign wealth funds, into national energy projects. To achieve this, the Bank will need to develop aggregation platforms and design appropriate investment products to make these assets accessible.
Finally, aware of the scarcity of projects ready for financing, the BAE will need to strengthen its support for project preparation. This will involve creating dedicated project development funds and offering technical assistance and advisory services to support project developers from initial design through to the financing phase, thereby ensuring a constant pipeline of bankable opportunities.
Beyond external capital, the BAE prioritizes the mobilization of local resources via pension and sovereign funds, through education, policy reforms, and aggregation platforms. Innovative models such as blended finance, green bonds, public-private partnerships (PPPs), long-term loans, and digital platforms are encouraged to diversify investments.
The scarcity of bankable energy projects is a major obstacle. The BAE is tackling this by creating project development funds, offering technical assistance and advice to support initiatives from conception to maturity. It also helps governments develop "national energy pacts" for aligned and financeable electrification plans, and organizes roundtables to connect developers and financiers.
To succeed by 2030, several factors are essential: sustained political will, reforms, regional integration to optimize resources, deeper local financial markets, innovation in financial instruments, capacity building, and strong international collaboration.
The African Energy Bank embodies the hope for a resilient and prosperous continent. As the driving force behind this transformation, it is paving the way for an Africa where energy is accessible to all, stimulating growth and equity. Forvis Mazars, committed to this dynamic landscape, continues to contribute its financial and strategic expertise to support this vision of an energy-secure continent.