The Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, has revealed that out of the 18 member countries of the African Petroleum Producers’ Organisation (APPO), only Ghana and South Africa voted against Nigeria’s bid for the African Energy Bank (AEB).
Lokpobiri further reiterated that the capital base of the upcoming AEB will grow from the initial $5 billion to $120 billion between the next three to five years.
The minister disclosed this in response to THISDAY’s enquiry bordering on the benefits of the multilateral financial institution to Nigeria, the hurdles faced by Nigeria before winning the bid to host the bank’s headquarters, among other issues.
The minister narrated how Nigeria met all six evaluation criteria to emerge the preferred host nation for the bank’s headquarters, saying Nigeria will benefit from the bank through financing availability, job creation and other long string of value addition to the country.
Lokpobiri had penultimate week announced that Nigeria won the hosting rights for the bank at an extraordinary meeting of the Council of Ministers of APPO, the umbrella body for oil-producing nations in Africa.
Being championed by APPO and the African Export-Import Bank (Afreximbank), the AEB is expected to focus investment in oil and gas projects across the continent and is set to start operations later this year with an initial $5 billion authorised capital base.
To facilitate its establishment, each African member country is obligated to contribute a minimum of $83 million for a total of around $1.5 billion, while Afreximbank and APPO as founder members are expected to match the amount.
The outstanding $2 billion will potentially be sourced from other investors, including Middle Eastern sovereign wealth funds.
In his response to THISDAY’s enquiry, the minister said the bank’s initial $5 billion capital base which is equivalent to N7.5 trillion when converted using the Nigerian Autonomous Foreign Exchange Rate Fixing (NAFEX) would grow to $120 billion in the next three to five years.
He informed that the rest of Africa and the investing community were beginning to have more confidence to invest in the oil and gas sector in the continent, particularly in APPO-member nations as a result of the bank.
“Generally, the rest of Africa and the investing community are beginning to have more confidence to invest in the sector, not just in Africa particularly in APPO as a result of the bank
“Out of the 18 member countries, only two, Ghana and South Africa who were also contenders were opposed to Nigeria’s bid. The rest supported Nigeria’s nomination.
“Thus, the bank is starting with $5 billion equivalent to N7.5 trillion if you convert it to our NAFEX exchange rate. The projection is that between three to five years, the bank is projected to grow to $120 billion in asset base.”
On the next steps to finally bring the bank to operation in Nigeria, the minister said the federal government and other stakeholders were working on the few obligations required within the next 90 days.
He said the obligations included getting the agreement signed and then furnishing the bank’s headquarters.
While expressing excitement over Nigeria winning the bid to host the bank, Lokpobiri said there was nothing personal but that he felt “satisfied that we had an objective to get the hosting right and we went for it and eventually got it.”
He said the congratulations should first go to President Bola Tinubu whom he noted provided the requisite support for them to go for the bank.
“And then to Nigerians and then APPO and the rest of Africa for coming up with this ingenious idea of finding a lasting solution to our funding problems in the oil and gas sector.
“If I make it personal, it reduces the value and that is why I am saying that we set out with the objective of winning the hosting rights. So congratulations not to me but to Nigerians, Mr. president and all Africans,” he said.
Commenting on the benefits of the bank to Nigerians, he argued that Nigeria remains the giant of Africa in terms of oil and gas production, adding that one of the country’s biggest challenges was funding and access to finance.
“With this bank, financing will be available, there would be employment and a long string of value addition,” he said.
Narrating the steps taken by the federal government to win the bid to host the headquarters of the bank, Lokpobiri said there were six criteria for wining the bid.
He said they included ratifying the charter for the establishment of the bank, provision of a suitable headquarters building for the bank to start operation as well as provision of free land for the bank headquarters to be built.
He added: “We also surpassed the bank’s initial funding contribution, which was put at 1.5 per cent of the total sum. Other technical issues considered were security, the number of flights that come into each country, and then the business landscape of each country, and Nigeria came tops after the evaluation.”
Peter Uzoho
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