Organization of the Petroleum Exporting Countries (OPEC) Must Lead the Charge to Reverse Global Fossil Fuel Financing Bans
For too long, Africa has borne the brunt of contradictory global energy policies. While developed nations continue to fast-track public and private investments into natural gas to bolster their own energy security, multilateral institutions enforce blanket bans on upstream oil and gas financing that disproportionately restrict African countries. In 2019, the European Investment Bank announced it would end fossil fuel financing by 2021, a position echoed by several European development agencies and financial institutions. The World Bank followed suit, gradually phasing out support for oil and gas and culminating in a near-total exclusion of upstream fossil fuel investments. While these policies may align with net-zero targets in wealthy economies, in Africa, they are actively obstructing access to energy, job creation and industrial growth.
Yet even as development finance dries up abroad, Europe has made clear exceptions for itself. Under its 2022 Taxonomy for Sustainable Activities, the EU classified certain natural gas and nuclear investments as 'transitional' – opening the door for continued funding within its borders. The result is a glaring double standard: natural gas is deemed essential for energy security in Berlin and Brussels, but off-limits in Lagos or Dakar. This hypocrisy must be addressed if the global energy transition is to be just and equitable.
Africa holds more than 125 billion barrels of proven oil reserves and over 620 trillion cubic feet of natural gas, yet over 600 million Africans lack access to electricity, and more than 900 million lack access to clean cooking fuels. In this context, African nations need robust investment in oil and gas infrastructure – not ideological restrictions that ignore the realities on the ground.
'What Africa needs right now is to drill, baby, drill. Most of our multilateral institutions don't finance oil and gas – they say it's wrong. It's extremely hypocritical. Denying fossil fuel investment is denying economic justice, food security and a pathway out of poverty for millions,' said NJ Ayuk, Executive Chairman of the AEC. 'We can't keep apologizing for oil. No country in the world has developed through renewables alone. OPEC members must pressure institutions like the World Bank to lift their financing bans and support Africa's right to industrialize.'
At the OPEC Seminar, the AEC urged producing countries to rally around three urgent financial priorities. First, OPEC members must press the World Bank and other multilateral institutions to lift harmful financing restrictions on fossil fuels. It is untenable that the World Bank – originally established to support post-war reconstruction and global development – continues to deny funding for upstream oil and gas projects across Africa. With recent signals from Bank leadership hinting at a possible policy shift, now is the time for oil-producing nations to push for a reversal that puts energy access and economic transformation in the Global South at the center of development finance.
Second, OPEC countries – with their sovereign wealth funds and surplus revenues – are uniquely positioned to create a dedicated investment vehicle for fossil fuel development in underfunded markets. An OPEC-led facility focused on financing strategic upstream projects could prove instrumental in unlocking capital for bankable ventures across Africa. Such a fund would not only accelerate production but also help stabilize global supply and pricing.
Finally, the Chamber emphasizes the need for a pragmatic, dual-track approach to the energy transition that recognizes the differing realities of the Global North and South. While developed nations move toward decarbonization, Africa must prioritize industrialization and energy security. Natural gas – abundant, reliable and cleaner-burning than coal – offers a critical bridge fuel to power fertilizer production, manufacturing, petrochemicals and regional electricity networks.
True climate justice must include energy justice, which means recognizing Africa's right to harness its resources, grow its economies and meet the needs of its people on its own terms. Africa does not need charity; it needs capital. As the voice of Africa's energy sector, the Chamber stands firm in its call for OPEC producers and the World Bank to help deliver it.
Distributed by APO Group on behalf of African Energy Chamber.
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