Energy Capital & Power

Africa’s Refining Industry Has a Bright Future, Needs Sustainable Funding to Thrive

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Oil refinery. Bigstock

In the midst of a global ideological battle on how to address Paris climate goals, global energy demand and the speed and shape of the energy transition, Africa – which has the fastest growing population – remains by far the most dependent on the import of refined fuels, regardless of its substantial oil and gas production capacity.

“Refining in Africa has a bright future, with a population that will grow and that will drive demand. We will need solutions to respond to this growing demand not just for the power sector but also for the transport sector and all other sectors affected by the need for competitively priced fuels,” said Anibor Kragha, Executive Secretary at the African Refiners and Distributors Association.

Speaking about ‘Refineries of the Future at the World Petroleum Congress in Houston, and just two days before he takes stage at the upcoming U.S. Africa Energy Forum, an event expected to considerably heighten the focus on energy investment and relations between the mother continent and North America, he pointed out that Africa’s downstream sector remains full of opportunity regardless of the challenges imposed by the energy transition, but that new frameworks are necessary to bridge the gap in access to capital.

“Fundamentally, we are facing a crisis of funding. We need to create a framework that defines a sustainable path for the development of these paramount infrastructures that make it possible and allows us to move forward. A framework that can be financed within the mindset of tackling climate change and addressing sustainability, but that does not stop us from developing as we need,” he added.

Kragha addressed the audience on the topics of climate justice and sustainable development in the African context, as more Western countries and institutions turn away from funding any type of hydrocarbon-related development, even though nearly 60% of the continent remains without access to a reliable power supply.

The narrative now turns towards sustaining development under more restrictive conditions, but to the African business leader that does not have to be an impediment. The African refineries of the future should be designed to minimize their carbon footprint, produce more efficient and less polluting fuels and be adaptable to changes in global demand, deploying systems that can make them flexible to the changes and challenges the future may bring, but that also comply with a vision of the future that is cleaner, more efficient and driven by sustainability. These are the projects that will find the funding that is so lacking.

“We have, over time, built the kind of organizations that are adaptable to the types of changes that we will need to address in the future. We will need the right cost-effective frameworks to fund these projects, to integrate them with renewable solutions and to integrate the people in them so they can deliver on these business plans and opportunities,” he concluded

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João Marques

João Marques

João is an International Conference Director at ECP. He holds an Erasmus Mundus Master’s degree in international journalism with a specialism in War and Conflict. He has worked as a journalist, commentator and analyst for a multitude of international publications on issues of energy, policy and economics. He co-authored the book Big Barrels: African Oil and Gas and the Quest for Prosperity, an Amazon bestseller that received great praise from the industry and the press.