To be funded as part of the AU's Complementary Peace Facility, it is expected to augment the existing European Union-Africa Peace Facility (EU-APF) and increase resources available for Africa-led peace support operations. It will also cover budget lines that cannot be financed by the APF, according to Said Djinnit, the AU's commissioner for peace and security.
"In the absence of adequate and predictable funding, especially for African-led peace-support operations, all efforts being exerted at the level of the continent to bring lasting peace and stability will be much more difficult to carry out successfully," Djinnit said.
The EU is the largest donor to the AU peacekeeping missions. The AU and EU have already signed a 7.5 million Euro (US$10.2 million) agreement for the enhancement of early warning and conflict prevention - part of the long-term capacity-building component of the APF.
The two bodies are also discussing additional funding to strengthen the capacity of the AU and the regional economic communities in peace and support operations and conflict resolution.
Claas Knoop, the German ambassador to Ethiopia, who co-chaired a meeting between the AU, G8 and donors to discuss the proposed fund, said on Monday the exact details had yet to be finalised.
The AU has several peacekeeping missions in Africa, including Darfur, Somalia, Burundi and the Comoros. However, most have experienced resource constraints.
The mission in Darfur in particular has been criticised as being ineffective - a charge the AU says is a direct result of inadequate resources. The one in Somalia has equally been limited by resources, a situation that has left only 1,600 troops deployed out of the proposed 8,000.
Djinnit said beyond the serious shortfall in the financial resources of the African Mission in Sudan (AMIS), the ad hoc nature of a significant part of the funding had led to a lack of predictability. This had made it difficult to plan, launch and sustain peace support operations.
"Even though the AU is not yet fully equipped and prepared, we are morally obliged to do whatever it takes to prevent the occurrence of conflicts and where they do erupt, facilitate their resolution," he said.
While the United Nations had the primary responsibility for the maintenance of international peace and security, its intervention in peacekeeping in Africa had been limited for several reasons.
"A number of conflict situations on the continent do not lend themselves [to intervention] either because the conditions on the ground are not perceived as being conducive or the parties involved are opposed to such intervention," he said.
Djinnit requested the G8 countries push the agenda that Africa-led missions be undertaken with the consent of the UN Security Council and with funding from the UN.