Africa’s ambition to turn its vast natural gas reserves into affordable electricity, industrial growth and regional trade is moving towards a critical financing milestone, with the Africa Energy Bank expected to begin funding projects in early 2027.
Farid Ghezali, Secretary General of the African Petroleum Producers Organization (APPO), said the bank, established by APPO and the African Export-Import Bank (Afreximbank), was nearing operational readiness. Its planned financing comes as Africa faces an estimated $1 trillion investment requirement over the next three decades to develop its gas resources.
Speaking during the technical panel of the GECF-AEC Strategic Forum at African Energy Week 2026 in Cape Town, Ghezali said the bank would adopt a corridor-based financing model, prioritising projects capable of stimulating economic development across national borders.
The model will focus on four areas: gas export infrastructure, domestic gas infrastructure, clean cooking and electricity generation.
The strategy seeks to address a persistent challenge in Africa’s energy sector: investment in exporting gas has often outpaced the development of pipelines, power plants and distribution networks needed to supply domestic and regional markets.
“Exports and domestic supply should not compete,” Ghezali said, arguing that countries must ensure local demand is met alongside their export ambitions.
APPO and the Gas Exporting Countries Forum (GECF) have also agreed to cooperate on developing gas corridors, with plans to harmonise transit tariffs and gas contracts among participating countries to facilitate cross-border trade.
Rashid Ali Abdallah, Executive Director of the African Energy Commission (AFREC), said much of the continent’s recent gas investment had concentrated on export terminals, while regional pipelines continued to struggle to secure financing.
He called for stronger regional financing arrangements and coordinated planning for gas pipelines and electricity transmission networks.
Such infrastructure could enable countries with gas reserves to supply neighbouring economies, support industrial production and improve access to reliable electricity. However, the benefits will depend on governments coordinating regulations, infrastructure plans and commercial agreements.
South Africa illustrates the urgency of the challenge. Jaco Human, Executive Officer of the Industrial Gas Users Association of Southern Africa (IGUA-SA), warned that industrial consumers could face the loss of natural gas supplies within approximately 18 months, with coal providing only a temporary alternative.
The association has established a gas aggregation company to pool demand, distribute risks and help underpin investment in new infrastructure.
Human said a proposed pipeline connecting the Orange Basin to Western Cape and inland markets would require annual demand of about 200 petajoules.
“We have much more demand than that, so the problem is not an economic one,” he said. “Rather, it is a coordination problem.”
The financing challenge extends beyond individual markets. Abubakar Abbas, Senior Energy Forecast Analyst at the GECF, said Africa would require at least $1 trillion over the next 30 years to develop its gas resources.
The scale of investment reflects the continent’s energy deficit. Annual per capita energy consumption stands at approximately 25 gigajoules, substantially below the global average, highlighting the gap between available resources and actual energy use.
Abderrezak Benyoucef, Head of Energy Studies at the Organization of the Petroleum Exporting Countries (OPEC), said gas could play a growing role in meeting future demand.
OPEC projects natural gas to increase its share of Africa’s energy mix from 17% to 23% by 2050. Electricity generation is expected to rise from less than 1,000 terawatt-hours to approximately 2,700 terawatt-hours, with gas accounting for about half of generation.
The proposed Africa Energy Bank could therefore become an important source of capital for projects that struggle to secure conventional financing, particularly cross-border infrastructure and domestic supply networks.
Its wider economic impact, however, will depend on how effectively it mobilises investment, supports commercially viable projects and balances export earnings with local energy needs.
For Africa, the central test will be whether its gas wealth can deliver more than export revenues by powering industries, creating jobs and expanding access to affordable electricity across the continent.
