Can the African Energy Bank Transform the Continent's Refining and Downstream Future?
The AEB's role in advancing refining capacity and downstream development will take center stage at this year's African Energy Week (AEW): Invest in African Energies 2025 conference – taking place from September 29 to October 3 in Cape Town. As Africa's premier platform for energy dialogue and investment, AEW: Invest in African Energies 2025 will spotlight the AEB's potential to transform Africa's energy landscape.
Driving Refining Capacity Through Local Investment
Despite holding over 125 billion barrels of oil and 620 trillion cubic feet of natural gas, Africa continues to struggle with insufficient refining capacity, forcing nations to export crude oil and re-import refined products at a premium. Institutions such as the African Refiners and Distributors Association (ARDA) have long-advocated for investment in modernizing and expanding Africa's refining infrastructure. Current projections indicate that African petroleum demand will increase from 4.1 million barrels per day (bpd) to 5.3 million bpd by 2040 – a trend that underscores the urgency of building self-sufficient refining systems.
As such, the AEB – headquartered in Abuja, Nigeria and scheduled to begin operations in the second quarter of 2025 – is uniquely positioned to support strategic investment across Africa's downstream and refining sectors. With an ambition to grow its asset base to $120 billion, the bank is positioned to unlock domestic value chains and catalyze large-scale projects that meet the continent's rising demand for petroleum.
Momentum in Downstream Expansion
Recent developments across the continent reflect growing momentum to scale refining capacity. Angola expects phase one of the Cabinda refinery to begin operations in 2025, bringing 60,000 bpd to the market. The country has a goal to increase capacity to 445,000 bpd and is on track to reduce imports of derivatives by 14% by 2026. Nigeria's 650,000-bpd Dangote Refinery began producing diesel and aviation fuel in 2024, marking a significant milestone for domestic processing. Similarly, upgrades to the Port Harcourt Refinery and ongoing expansion to Ghana's Sentuo Oil Refinery highlight national efforts to meet growing demand.
Equatorial Guinea's recent agreement with Shanghai SupeZet to build a new refinery and expand the Bata facility further illustrates the strategic push toward local processing. These efforts not only reduce import dependency but also create jobs, enhance energy security and promote regional trade in refined products.
Aligning Regional Integration and Investment
Africa's refining and energy infrastructure ambitions are closely tied to broader goals of economic integration. The African Continental Free Trade Agreement, ratified by more than 48 countries, creates a platform for cross-border energy projects by removing trade barriers and harmonizing investment policies. It also supports the development of regional supply chains, enhancing the commercial viability of shared infrastructure.
The AEB will play a central role in supporting these regional ambitions by working with over 700 African financial institutions and APPO member states to channel funding into integrated, cross-border energy systems. By reducing the time, cost and risk associated with project development, the bank could accelerate the pace of infrastructure buildout across the continent.
Distributed by APO Group on behalf of African Energy Chamber.
About African Energy Week:
AEW: Invest in African Energies is the platform of choice for project operators, financiers, technology providers and government, and has emerged as the official place to sign deals in African energy. Visit www.AECWeek.com for more information about this exciting event.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Zawya
7 hours ago
- Zawya
Nigeria: NESG pre-summit dialogue charts roadmap to industrialisation through oil, gas sector
The Nigerian Economic Summit Group (NESG) on Tuesday convened a high-level Pre-Summit Dialogue themed Unlocking Industrial Growth Series: The Evolving Oil and Gas Ecosystem', setting the tone for its upcoming 31st Nigerian Economic Summit (NES #31). The NESG pre-summit dialogue brought together top policymakers, private sector leaders, and academic experts to explore how Nigeria's oil and gas sector can catalyse industrialisation, innovation, and inclusive development. Private Sector Co-Chair of the NESG Industrial Policy Commission, Mansur Ahmed, described the dialogue as both timely and strategic. 'As Nigeria's reform agenda advances, today's discussion is essential to charting a path that transforms our oil wealth into sustainable industrial growth,' he said in his opening remarks. Despite being Africa's largest oil producer, Nigeria lags in industrial competitiveness. Highlighting this concern, Mr. Kelvin Emmanuel, Thematic Lead of the NESG Oil and Gas Thematic Group, noted that Nigeria ranks 8th on the 2024 African Industrialisation Index and 98th globally on the UNIDO Competitive Industrial Performance Index. 'With a manufacturing value added per capita of just $216, far below South Africa's $645 and Egypt's $524, Nigeria's oil wealth has sustained an extractive development model instead of fueling technology-driven industrialisation,' he observed. Ahmed called for urgent reforms that align with the Petroleum Industry Act (PIA) and continental initiatives like the African Union's Agenda 2063 to reverse the trend. Ms. Laura Ani, Senior Researcher at the Nigerian Institute of Advanced Legal Studies, said Nigeria stands at a turning point. 'We must shift from merely earning oil revenue to using it as a foundation for industrial transformation. This means linking resource management to coordinated innovation and industrial policy,' she argued. Adding an academic lens, Dr. Aminu Abdullahi Isyaku, Head of the Geology and Mining Department at the University of Abuja, emphasised the need for a 'Triple Helix Model', structured collaboration among government, industry, and academia. 'Research and Development is no longer optional. Deepening local content and aligning academic curricula with industry demands are essential for creating value-added industries,' he noted. From the private sector, Mrs. Funmi Ogbue, CEO of Zigma Limited, pointed to global best practices. Citing Norway as a model, she underscored the importance of stable policies, long-term contracts, Research and Development investments, and export-driven strategies. 'We need consistent, integrated public-private collaboration. Short-term or politically driven efforts will not deliver the transformation Nigeria urgently needs,' she warned. Regulatory insights were provided by Dr. Taiwo Ogunleye, Associate Professor at the Nigerian Institute of Advanced Legal Studies, who stressed that implementation, not legislation, is the real challenge. 'The Petroleum Industry Act already contains the tools for transformation. Full enforcement of provisions on indigenous participation, licensing, R&D, and infrastructure is key,' he noted. At the end of the session, stakeholders agreed that aligning this vision with frameworks like the African Continental Free Trade Area (AfCFTA) would be critical to unlocking long-term prosperity. The session also concluded with a unified commitment to pushing for a robust, innovation-led industrial policy anchored on Nigeria's oil and gas assets. Copyright © 2022 Nigerian Tribune Provided by SyndiGate Media Inc. (
Zawya
7 hours ago
- Zawya
Zambia's dollar bonds drop over debt indicator worries
NAIROBI - Concerns over Zambia's weakening ability to deal with its debt burden pushed the country's international bonds sharply lower on Wednesday, after the International Monetary Fund published its latest assessment of the southern African nation. Zambia's 2053 dollar-denominated bond lost more than 4 cents in early trading to bid at 68.542 cents on the dollar, hitting a one-month low and falling below the 70 cents threshold below which asset managers consider a country's debt distressed. By 1048 GMT it had pared some of the losses to trade at 69.466 cents, Tradeweb data showed. The drop comes in the wake of the IMF executive board approving the fifth review of Zambia's current lending programme late on Tuesday. As part of the sign-off, the Fund published its latest economic and debt figures, showing Zambia's debt-carrying capacity - or the assessment of a government's ability to handle its debt - remained weak, with the composite indicator used to gauge the level weakening to 2.58, from 2.62 previously. Zambia - together with Ukraine and Sri Lanka - was one of the countries issuing so-called state contingent debt instruments as part of its restructuring, instruments that are designed to lure investors with a promise of better payouts if certain economic or fiscal targets are achieved. Disappointment over the key indicator going in the wrong direction weighed on bonds, analysts said. "A 2.69 cut-off is needed for two semi-annual consecutive reviews for the 2053 bond to become a higher-paying 2035 bond during the 2026-28 observation period," said Samir Gadio, Africa strategist at Standard Chartered, referring to the terms of the bond that was created when Zambia restructured its debt. Zambia overhauled its bilateral debt in a deal struck last year after it opted to restructure its debt under the G20's Common Framework initiative, a process that also involved combining $3 billion of bonds into two new ones with their own payment schedules and conditions. The downward revision of the Southern African nation's composite indicator score was mainly caused by a worsening of the import coverage ratio, market participants said, adding that there was still room for it to improve. "There is still a strong chance that the score will be upgraded in 2026," said Anthony Simond, senior emerging markets debt portfolio manager at Aberdeen.
Zawya
8 hours ago
- Zawya
South Africa: Sibanye-Stillwater wants US to impose tariffs on Russian palladium
Sibanye-Stillwater has asked the United States to consider imposing a tariff on Russian palladium imports to support the long-term viability of US supplies, in a move that could increase volatility in palladium prices. The petition filed by Johannesburg-based Sibanye-Stillwater adds another layer of uncertainty to prospects for platinum group metals (PGMs) after a rally in prices so far this year due to lower first-half production in South Africa and thin liquidity in the spot market. "We believe that Russian palladium imports are being sold below market prices due to various factors, beginning primarily after the Russian invasion of Ukraine in 2022," Sibanye-Stillwater's chief executive Neal Froneman said in a statement on the company's website dated July 31. "Obtaining relief from dumped and subsidised Russian imports will give Sibanye-Stillwater, its employees, and the entire US PGM industry, an opportunity to compete on a more level playing field," he added. A final decision on the petition is likely within 13 months. Russia's Nornickel, the world's largest palladium producer with a 40% share of global mined output, declined to comment. Sibanye-Stillwater, which has production assets in South Africa and the United States, suffered its second consecutive full-year loss last year after writing down $500m of its US palladium assets amid low prices. Spot palladium prices are up 31% so far this year, and the outlook for the rest of the year is positive for miners: analysts forecast in a Reuters poll in July that the palladium price would rise in 2025 for the first time in four years, aided by platinum's rally. "Although placing duties on Russian metal would not necessarily impact the market balance of palladium, it could result in the re-routing of global physical metal flows, leading to price volatility," analysts at Heraeus said. Russia and South Africa are the top suppliers of palladium to the United States, according to the Trade Data Monitor. For Russia, China is the second-largest buyer of the metal after the United States. Russian palladium imports to the US increased 42% year-on-year to more than 500,000 troy ounces in January-May, according to Heraeus. PGMs, used widely to clean exhausts in gasoline vehicles, have so far avoided both US sanctions imposed on Russian companies over the Ukraine war and any import tariffs announced by Donald Trump. All rights reserved. © 2022. Provided by SyndiGate Media Inc. (
