Africa Energy Bank: Afreximbank Warns against delay in transferring equity subscription funds by APPO

The African Export-Import Bank has warned that continued delay by the African Petroleum Producers Organisation in transferring equity subscription funds could stall the project indefinitely.

Afreximbank in a letter to APPO Secretary-General, Dr Omar Farouk Ibrahim, said APPO’s position that funds would only be moved after a launch date, headquarters selection, and appointment of a President risked derailing the bank’s formation.

In June, Farouk had refused a request by Afreximbank to transfer equity subscription funds to the AEB Equity Investment Account, saying, “On our part, we cannot unilaterally transfer what is in an escrow account that we do not fully control to Afreximbank.

” The day we agree on a launch date, after securing the headquarters, and hiring a President, APPO and its member countries shall transfer all the funds in their accounts to the account of AEB.”

However, Afreximbank disagreed with Farouk, saying it was “concerned that this might have been a mistake” because such a stance would mean the bank could not be formally established.

The letter, signed by the Executive Vice President, Global Trade Bank, and the executive responsible for delivery of the AEB project, Mr Haytham Elmaayergi, clarified: “The practical consequence of this position is that we would be unable to proceed with the formal establishment of AEB.

” The payment of equity subscription funds into the AEB Equity Investment Account, as a deposit toward share subscription, is an absolute condition precedent to establishing AEB. Without the funds being paid into the AEB Equity Investment Account, we will not be able to formally confirm who the shareholders are for share allotment, or whether indeed, there are prospective shareholders.”

Afreximbank stated that without the fund, the first General Meeting cannot be convened, as there would be no pioneer shareholders. Also, “establishment actions set out in the AEB establishment agreement and charter, cannot be taken; board cannot be elected; a President cannot be appointed; and ultimately there would be no Africa Energy Bank.”

In the interest of all institutions and stakeholders in the AEB project, Afreximbank requested compliance with the Establishment Agreement and Charter of AEB to expedite the project’s launch.