(Cape Town) – The African Export-Import Bank (Afreximbank) has signed a series of significant energy-related deals worth $127 million during the ongoing Africa Energy Week in Cape Town. According to a statement from the African Energy Chamber, these agreements include financing facilities aimed at supporting Africa’s energy infrastructure and trade activities.
One of the key deals includes a $100 million revolving back-to-back letter of credit facility for JE Energy Ltd., which will be used to finance the purchase and sale of crude oil from Guyana. Another notable agreement is a $16.8 million asset finance facility for Global Links Ocean Streams Ltd. to acquire an oil tanker for its operations in Nigeria. Afreximbank also signed a $10 million revolving trade finance facility with Dorman Long Engineering Ltd.
Afreximbank’s involvement in the energy sector is part of its broader strategy to foster economic growth and trade across Africa. The bank has been pivotal in facilitating the development of Africa’s energy sector. The African Energy Chamber, which hosted the conference, highlighted that the continent has seen fluctuating levels of investment in the energy sector, with a significant drop in 2020. However, there is optimism about future growth, with expectations that investment in the sector could rise again to $58 billion in the coming years.
On the same day as the energy deals, Afreximbank announced that The Republic of Gambia had become the 19th member of its development impact investment arm, the Fund for Export-Development in Africa (FEDA). Rwanda was the first country to sign the FEDA establishment agreement, and other countries such as Chad, Congo, Kenya, Togo, and South Sudan have since joined.
In 2021, Afreximbank provided $20 billion in trade financing, with plans to double this amount within the next two years to boost intra-continental trade. The bank’s initiatives in energy financing and development reflect its commitment to improving Africa’s economic infrastructure and fostering trade among African countries.
In addition to its energy sector investments, Afreximbank is also focused on lobbying for the renewal of the African Growth and Opportunity Act (AGOA). The bank has allocated $300,000 to lobby the incoming US government, led by Donald Trump, to prioritize the extension of AGOA beyond its September 2025 expiration date. AGOA has allowed African countries to access the US market duty-free for specific products, including textiles and apparel from countries like Ghana, Mauritius, and Kenya. South Africa benefits from the deal by exporting cars to the US, while Mozambique exports sugar, tobacco, and nuts.
Afreximbank’s lobbying efforts aim to ensure that AGOA remains a vital tool for promoting African exports to the United States, supporting the economic development of African nations. This move is part of broader efforts by African governments to extend the trade agreement’s lifespan and continue benefiting from preferential trade terms with the US.
Table: Key Afreximbank Energy Deals (2024)
| Deal | Amount | Purpose |
|---|---|---|
| JE Energy Ltd. – Letter of Credit | $100 million | Financing purchase and sale of Guyana crude oil |
| Global Links Ocean Streams Ltd. – Asset Finance | $16.8 million | Acquisition of an oil tanker for Nigerian operations |
| Dorman Long Engineering Ltd. – Trade Finance | $10 million | Revolving trade finance facilit |