• Oil & Gas - News
  • Updated: March 15, 2023

Afreximbank, AFC Invest $16 Billion In Oil, Gas Projects

The African Export Import Bank (Afreximbank) and the African Financing Corporation (AFC) are investing over $16 billion in oil and gas projects throughout Africa.

This was revealed on Tuesday in Cape Town, South Africa at the current African Refiners and Distribution Association (ARDA) conference.

This occurs as conference participants urged Africans to keep money on the continent in order to finance the over $190 billion in annual energy investment required on the continent.

Afreximbank is investing $15 billion of the banks' investment, while AFC has already made an initial investment of over $800 million and is expected to invest an additional $200 million.

Rene Awembeng, Global Head, Client Relations at Afreximbank, claimed that the corporation has an oil and petrol portfolio worth more than $15 billion and a strong pipeline that spans the entire continent.

Speaking outside the conference, he stressed the importance of shared infrastructure and the need for the continent to be financially self-sufficient in order to achieve the anticipated levels of development.

Awembeng stated that the continent is in a critical situation where demand for energy continues to rise on the backdrop of a surging population.

Awembeng stated that large infrastructure development, including refineries that would meet demand on the continent, must be prioritised and supported because the continent relies primarily on the importation of petroleum products at a time when foreign exchange demand is hovering at $100 billion annually and required energy investment annually stands at $190 billion.

According to Awembeng, the establishment of the Africa Energy Bank to finance the continent's energy transition and fossil fuel agenda is still sacred.

Awembeng expressed his dismay that Africa continued to buy all refined products and expressed concern over the escalating costs of imported petroleum products.

“Africa has not invested in its refineries or refining capacity.

“We’ve not invested in our storage facilities.

“We’ve not invested in our pipelines sufficiently to meet the demand.

“So with the COVID crisis, and now the Ukraine crisis we are now in a very difficult position.

“A lot of the international banks and some of the banks that were financing oil and gas transactions have retreated from Africa for a number of reasons; leaving the burden on African financial institutions and some of the development financiers like the African Export Import Bank to look into the problem.”

“The challenge now is we have significant capacity to meet the demand of $190 billion every year to finance oil and gas requirements in Africa.

“Do we have the capacity on the continent to support the $15 billion of rehabilitation of refining capacity required in North Africa, West Africa and East Africa? I don’t think we are.

“So we are going into a crisis where if you look at also what is happening with food security in terms of fertilizers and grain, we have to import plus the high costs of importation of refined products.

“We are in a very challenging situation as a continent to be able to finance oil and gas,” Awembeng said.

Senior Investment Associate at the AFC, Shayo Olumide, stated that the AFC has disbursed $800 million to support the African refinery sector and has an additional $210 million in its near-term pipeline in his speech on financing infrastructure projects to accelerate Africa's energy transition.

Noting the need for sustainable finance, he stated priority for the Environment, Sustainability and Governance is important for funding consideration.

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Lawrence Agbo
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