Afreximbank, the African Export-Import Bank, has allocated $3 billion to fund the procurement of refined products across Africa. The effort is part of a broader plan to strengthen the continent’s refining capabilities and decrease its reliance on imported refined goods, as reported by Reuters.
Kanayo Awani, an executive vice president at Afreximbank, declared this on Monday at an energy conference in Cape Town, South Africa.
Afreximbank’s $3 billion revolving financing initiative for intra-African oil imports will support the acquisition of products such as premium motor spirit, automotive gas oil, heavy fuel oil, jet fuel, and kerosene.
Afreximbank is a crucial investor in Africa’s oil and gas industry, contributing to projects such as the 650,000 barrels-per-day Dangote refinery and the Lobito and Cabinda refineries in Angola.
The bank has also provided funding for the importation of refined products from outside Africa.
Africa exports approximately 80% of its crude oil and 45% of its natural gas, leading to a heavy reliance on imported refined products to meet domestic demand. As noted by the bank and energy experts, the dependence creates supply chain risks and drives up import expenses, which are estimated at $30 billion annually.
The bank is collaborating with the African Petroleum Producers Organization (APPO), an alliance of 18 African oil-exporting nations. It is co-investing in the AEB and takes a leading role in guiding the management and implementation processes.
Africa incurs approximately $30 billion each year in petroleum import expenses due to insufficient refining capacity. “Our goal is to support 3mbbl/d of refining capacity in the near to medium term; that is our ambition,” Awani said.
As Africa’s population grows and economies expand, demand for cleaner fuels is projected to rise. A joint report by energy consultancy CITAC and Puma Energy estimates a 56% increase by 2040, reaching 142 million metric tons from 2022 levels.
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