Islamic finance fuels Arab-African energy ties
Middle Eastern investment in Africa’s energy sector surges as Islamic financing, led by Murabaha structures, unlocks new opportunities for clean and traditional energy projects
LUANDA, Angola (MNTV) – The African energy sector is drawing increasing interest from Middle Eastern investors, with Islamic finance playing a pivotal role in fueling cross-regional cooperation.
Leveraging Shariah-compliant financial instruments, Africa is now tapping into billions of dollars in investments from Gulf nations eager to expand their footprint on the continent.
In a significant move, the Africa Finance Corporation (AFC) has secured $400 million through Murabaha Islamic financing, a Shariah-compliant funding mechanism.
This investment has attracted 11 major financial institutions, including Abu Dhabi Islamic Bank, Al Rajhi Bank, and Emirates Islamic Bank, signaling a renewed push by Middle Eastern capital into Africa’s energy infrastructure.
Islamic finance has become a major driver of Africa’s energy transition, providing ethical and sustainable investment solutions. As the continent pivots toward cleaner energy, Middle Eastern investors, through Islamic finance, are poised to play a key role in financing projects that bridge Africa’s energy deficit.
Arab nations—including the UAE, Qatar, and Saudi Arabia—have already made substantial inroads. UAE’s Masdar has committed $10 billion to develop 10GW of clean energy capacity in Africa by 2030.
Saudi Arabia’s ACWA Power is spearheading solar energy and desalination projects, while Qatar Energy is channeling investments into hydrocarbon exploration across multiple African nations.
Despite this growing engagement, Africa’s energy potential remains largely untapped. Opportunities for further collaboration lie in LNG terminals, gas-to-power initiatives, and oil and gas exploration.
Islamic financing, with its emphasis on asset-backed, risk-sharing structures, presents a viable model for unlocking these prospects.
The surge in Middle Eastern investment will be a key focus at the upcoming ‘Invest in African Energy’ forum in Paris in May 2025. As the largest African energy investment summit outside the continent, the event will facilitate discussions between African governments and Middle Eastern financiers to scale up energy infrastructure investments.
For African energy firms, Islamic finance presents a gateway to capital that can accelerate their development ambitions.
For Arab investors, the African market offers access to untapped energy resources and expanding business opportunities, reinforcing the growing synergy between the two regions.
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