BREAKING: Afreximbank Launches $3bn Petroleum Financing Programme to Boost $14bn Intra-Africa Oil Trade
The African Export-Import Bank (Afreximbank) has launched a $3 billion petroleum products financing programme to help fund the trade of up to $14 billion of fuel produced on the continent and the Caribbean.
The initiative seeks to address Africa’s persistent reliance on imported refined petroleum products, which accounted for an amount of $30 billion annually in petroleum import costs due to inadequate refining, the bank said.
The programme expected to finance between $10 billion and $14 billion of intra-African petroleum imports is also designed to foster investments for transport of the fuel across the continent.
According to the bank, the programme seeks to leverage the growing refining capacity that Afreximbank has helped establish across the continent, while aligning with the objectives of the African Continental Free Trade Area (AfCFTA) agreement, which includes facilitating intra-African trade, promoting industrialisation, and creating jobs on the continent.
By deploying innovative trade finance and supply chain solutions tailored to key stakeholders’ needs in terms of tenure, price format and logistics requirements, it stated that this initiative supports Afreximbank’s strategic goals of advancing energy security, strengthening regional value chains, and fostering economic resilience within the continent and the Caribbean.
To buttress the extent of its activities in weaning the continent from imported fuels, Afreximbank said it is the largest financier of the Dangote refinery which commenced operations in January 2024.
In addition, it stated that it is also supporting the financing of the 200,000 bpd Lobito Refinery development, building on the progress made on the 60,000 bpd Cabinda Refinery, which it also supported.
Besides, the bank said it has financed the refurbishment of the 210,000 bpd Port Harcourt Refinery, and recently approved financing in support of the development of Bua Refinery and Azikel Refinery, all in Nigeria.
Through these investments, and the continual trade finance support for Société Ivoirienne de Raffinage (SIR), Cote d’Ivoire, Afreximbank explained that it is on its way to creating over 1.3 million bpd refining capacity and helping to convert the Gulf of Guinea from an exporter of crude oil into an important refining hub for the continent and the world.
Key products to be traded under the programme are refined petroleum products, including but not limited to Premium Motor Spirit (PMS), Automotive Gas Oil (AGO), Heavy Fuel Oil (HFO), Jet Fuel, and Kerosene, with the eligible exporters being refineries operating in Africa.
The $3 billion Revolving Intra-African Oil Import Financing Programme is intended to mainly provide critical trade finance to oil traders (both African and international), banks, and governments represented by their Ministry of Finance or Ministry of Petroleum Resources/Energy and state-owned enterprises.
These institutions are mandated to import refined petroleum products and seek to source refined products from African refineries for onward consumption within the continent and export opportunities as may be applicable.
Afreximbank pointed out that its affiliated trading entity ATDC Minerals (ATMIN) will also participate actively in the trading and financing activities of the leading African oil trading companies with long term relationship with Afreximbank who are also expected to support the effort.
Commenting on the launch, President and Chairman of the Board of Directors, Afreximbank, Prof. Benedict Oramah, said that the programme would galvanise efforts towards making the Gulf of Guinea a key refining hub.
“Whilst the programme will have a direct impact on the volume of the refined petroleum products produced and consumed in Africa, it will also have a multiplier effect on the downstream petroleum value chain as it will catalyse critical investments in shipping and marine logistics for intra and extra African trade of crude oil and refined products.
“The multiplier effect will also be seen in marine cargo insurance and other ancillary businesses within the sector. We want to see an increased proportion of the about 4 million bpd of crude oil produced in the Gulf of Guinea refined in Africa,” Oramah added.
Also commenting on the initiative, President of the Republic of Malawi, Dr. Lazarus Chakwera, said the programme was a clear demonstration of Africa’s resolve to take charge of its own energy future.
“We commend Afreximbank for this timely intervention, which stands to benefit African countries like Malawi by reducing import dependency, strengthening regional supply chains, and keeping more value within the continent.
“Most importantly, it will deliver real impact to our citizens by ensuring more stable and affordable access to refined petroleum products, which are essential to Malawians’ daily life and economic productivity,” he said.
