In a move to reduce Africa’s reliance on imported refined petroleum products, which cost the continent an estimated US$30 billion annually due to insufficient refining capacity, the African Export-Import Bank (Afreximbank) has launched a US$3 Billion Revolving Intra-African Oil Trade Financing Programme. This initiative will finance the purchase of refined petroleum products by African and Caribbean oil buyers.
As a revolving facility, it is projected to finance approximately US$10 billion to US$14 billion of intra-African petroleum imports. The program aims to capitalize on the increasing refining capacity that Afreximbank has supported across the continent, while also aligning with the objectives of the African Continental Free Trade Area (AfCFTA), which include facilitating intra-African trade, promoting industrialization, and creating jobs.
By employing innovative trade finance and supply chain solutions tailored to the specific needs of stakeholders regarding tenure, pricing, and logistics, this initiative supports Afreximbank’s strategic goals of enhancing energy security, strengthening regional value chains, and fostering economic resilience within Africa and the Caribbean.
Afreximbank is the primary financier of the Dangote refinery, which commenced operations in January 2024, and is also supporting the development of the 200,000 bpd Lobito Refinery, building on its prior support for the 60,000 bpd Cabinda Refinery. Additionally, the Bank has financed the refurbishment of the 210,000 bpd Port Harcourt Refinery and recently approved financing for the Bua Refinery and Azikel Refinery, all in Nigeria. Through these investments and ongoing trade finance support for Société Ivoirienne de Raffinage (SIR) in Côte d’Ivoire, Afreximbank is on track to help create over 1.3 million bpd of refining capacity, transforming the Gulf of Guinea from a crude oil exporter into a significant refining hub for the continent and the world.
Key products eligible for trade under this program include refined petroleum products such as Premium Motor Spirit (PMS), Automotive Gas Oil (AGO), Heavy Fuel Oil (HFO), Jet Fuel, and Kerosene. Eligible exporters are refineries operating within Africa.
The US$3 billion Revolving Intra-African Oil Import Financing Programme is primarily intended to provide crucial trade finance to oil traders (both African and international), banks, and governments (represented by their Ministries of Finance or Petroleum Resources/Energy) and state-owned enterprises mandated to import refined petroleum products. These entities can source refined products from African refineries for consumption within the continent and for potential export. Afreximbank’s affiliated trading entity, ATDC Minerals (ATMIN), will also actively participate in the trading and financing activities of leading African oil trading companies with long-term relationships with Afreximbank, who are also expected to support this effort.
Approved applicants can request utilization under the Global Limit within allocated sub-limits upon KYC clearance and satisfactory completion of conditions precedent, including:
- Issuance/Confirmation of Letters of Credit or any acceptable trade instrument with refineries in Africa as beneficiaries.
- Discounting of Letters of Credit or any acceptable trade instrument to the benefit of refineries in Africa.
- Prepayment and direct advances to eligible refineries in Africa.
Commenting on the launch, Professor Benedict Oramah, President and Chairman of the Board of Directors, Afreximbank, stated that the program “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 mbpd of crude oil produced in the Gulf of Guinea refined in Africa.”
His Excellency Dr. Lazarus Chakwera, President of the Republic of Malawi, also commented, “This programme is 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.”
Source: Afreximbank.com
