African Export-Import Bank (Afreximbank) has launched a $3 billion Revolving Intra-African Oil Trade Financing Program to finance the purchase of refined petroleum products by African and Caribbean oil buyers.
The program aims to address Africa’s persistent reliance on imported refined petroleum products, which accounted for an amount of $30billion annually in petroleum import costs due to inadequate refining,the bank announced in a statement on Tuesday.
As a revolving facility, the bank expects to finance about $10 billion to $14 billion of Intra-African petroleum imports.
This program 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 industrialization, 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, 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.
Afreximbank is the largest financier of the Dangote refinery which commenced operations in January 2024 and 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.
In addition, the Bank 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 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, the statement noted.
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. The eligible exporters are 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 government ministerial offices.
MG/abj/APA