Yemisi Izuora
The African Export–Import Bank (Afreximbank), a key investor in oil and gas projects, is pushing to help oil producing countries in Africa to add value to their economies by investing in infrastructures that will enable them earn more profits from crude oil.
Africa exports around 80 per cent of its crude oil, and 45 per cent of the natural gas it produces, leaving the fast-growing continent heavily-reliant on imported refined products, according to the bank and analysts.
A lack of storage infrastructure and older refineries with relatively small output capacity characterise the energy landscape of sub-Saharan Africa.
“The time has come for Africa to take control of its energy destiny,” Kanayo Awani, executive vice-president at Afreximbank told an energy conference in Cape Town, South Africa, on Monday.
The bank has therefore earmarked $3 billion to finance the purchase of refined products within Africa as part of broader plans to boost refining capacity, a senior executive said.
Awani said the $3 billion revolving intra-African oil importing financing initiative will be used for products including premium motor spirit, automotive gas oil, heavy fuel oil, jet fuel, and kerosene, among others.
Afreximbank, which has invested in the 650,000 barrels per day (bpd) Dangote refinery in Nigeria, and the Lobito and Cabinda refineries in Angola, has traditionally helped finance imports of refined products from outside the continent.
Africa spends an estimated $30 billion in annual petroleum import costs due to inadequate refining capacity, Awani said.
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In Nigeria, for example, increased investments have helped create 1.3 million bpd of refining capacity, helping make the Gulf of Guinea a key refining hub for the continent.
“Our goal is to support 3 million barrels per day of refining capacity in the near to medium term, that is our ambition,” Awani told Reuters.
A joint report last year by energy consultancy CITAC and Puma Energy found that the demand for cleaner fuels was set to rise by 56% from 2022 levels to reach 142 million metric tons by 2040.
Afreximbank is also playing a pivotal role in the establishment of the Africa Energy Bank (AEB), a new financial institution with an initial capitalisation of $5 billion, aimed at addressing funding challenges in Africa’s energy sector, particularly in oil and gas projects.
The bank is partnering with the African Petroleum Producers’ Organization (APPO), a group of 18 oil-exporting African nations, to bring the initiative to fruition, co-investing in the AEB and taking a lead role in advising on its management and implementation processes.
Africa spends an estimated $30 billion in annual petroleum import costs due to inadequate refining capacity, Awani said.
In Nigeria, for example, increased investments have helped create 1.3 million bpd of refining capacity, helping make the Gulf of Guinea a key refining hub for the continent.
A joint report last year by energy consultancy CITAC and Puma Energy found that the demand for cleaner fuels was set to rise by 56 per cent from 2022 levels to reach 142 million metric tons by 2040.