Afreximbank, an oil and gas investor, has allocated $3 billion to support local refineries

A senior executive revealed that the African Export-Import Bank, (Afreximbank), which is a major investor in oil-and-gas projects, had set aside $3 billion for financing the purchase of refined goods within Africa, as part of plans to increase refining capacities.

Bank and analysts say that Africa exports 80% of its crude oils and 45% of its natural gas, making it heavily dependent on imported refined products.

The energy landscape in sub-Saharan Africa is characterized by aging refineries and a lack of storage infrastructure.

Kanayo Awani - executive vice president at Afreximbank - spoke on Monday, January 29, 2009, to an energy conference held in Cape Town, South Africa.

Awani stated that the $3 billion intra-African oil import financing initiative would be used to finance products such as premium motor spirit and automotive gas oil. It will also cover heavy fuel oil, jetfuel, kerosene and other fuels.

Afreximbank has helped finance the importation of refined products from other continents. It has invested in the Dangote refinery, which produces 650,000 barrels of oil per day in Nigeria, as well as the Lobito refineries and Cabinda refineries, both in Angola.

Awani stated that Africa imports petroleum at a cost of $30 billion annually due to insufficient refining capacity.

Increased investments in Nigeria have created 1.3 million barrels per day of refining capability, making the Gulf of Guinea an important refining hub on the continent.

Awani said, "Our ambition is to support 3,000,000 barrels of refinery capacity per day in the near-to-medium term."

According to a joint report released last year by CITAC Energy and Puma Energy, the demand for cleaner fuels is expected to increase by 56% by 2040 compared to 2022. This will result in 142 millions metric tons of fuels. (Reporting and editing by Rachna uppal; Wendell Roelf)

(source: Reuters)