)
)
)
How Developers are Financing African Gas Amid a Western Bank Retreat
Western commercial banks have steadily reduced their exposure to fossil fuel lending in Africa, driven by climate commitments, litigation risk and reputational pressure. The retreat has created a financing gap at an inconvenient moment for the continent’s energy build-out, as gas projects across Mozambique, Nigeria, Senegal, Tanzania and Equatorial Guinea are all approaching or awaiting final investment decisions.
A panel discussion at the Energy Finance Forum during the African Energy Week (AEW) 2026 Conference and Exhibition in Cape Town, October 12-16, titled “The Investment Case for African Gas: Risk, Returns and Financing Structures,” will examine how developers, DFIs and investors are responding.
The most significant institutional response is the Africa Energy Bank (AEB), established by the African Petroleum Producers' Organization and the African Export-Import Bank with an initial capital base of $5 billion. Headquartered in Abuja and advancing towards its launch, the AEB is designed to offer risk-sharing and project validation for developments that remain commercially viable but difficult to finance through traditional channels.
Multilateral guarantee instruments are also evolving. The Multilateral Investment Guarantee Agency's $495 million framework with CrossBoundary Energy, executed in July 2025, uses a portfolio-based structure to cover currency and transfer risks across up to 20 African countries under a single agreement. The AEW panel will address how similar mechanisms, including partial credit guarantees and concessional first-loss tranches, can be applied to gas to bring institutional investors into the sector.
Private credit also has a role to play in filling the gap. Direct lending funds, mezzanine providers and resource-backed lenders are entering African gas financing, often accepting higher risk in exchange for premium returns. These exchanges reflect the higher pricing the international market now assigns to fossil fuel projects on the continent. For developers, these structures can preserve equity and avoid the dilution that comes with raising new capital in a constrained environment.
Domestic gas pricing will be yet another topic on the discussion table at AEW 2026. In several African markets, gas sold for power generation is priced well below international levels, compressing returns and making it harder to secure project finance. How developers achieve bankable economics under regulated pricing while meeting affordability objectives is among the questions the panel will deliberate.
The discussion will be rooted in current trends, examining how countries like Algeria and Nigeria can position themselves to capture competitive returns in a global gas market reshaped by the Hormuz supply disruption. Both countries have the reserves and infrastructure to respond to redirected European and Asian buying interest, but doing so requires financing and export structures that can move quickly.
“The financing architecture for African gas is being rebuilt in real time, with new institutions, new instruments and new investors entering the market every month,” says NJ Ayuk, Executive Chairman of the African Energy Chamber. “AEW 2026 is where developers, lenders and governments come together to structure the deals to make it happen.”