Afrexim Bank commits $5bn to Africa’s oil, gas projects

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By Adewale Sanyaolu

President of AfreximBank, Dr. Benedict Oramah, has disclosed that the lender has extended loans to players in Africa’s oil and gas industry to the tune of $5billion by the third quarter of 2021.

Oramah stated this at the African Local Content Investment Forum (ALIF) hosted by the Nigerian Content Development and Monitoring Board (NCDMB) in Lagos.

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Of this amount, he said the bank has supported the 650,000 barrels per day(bpd) Dangote Refinery with $1 billion.

Acknowledging the impact of the global energy transition on investment philosophies of international operating companies and financial institutions, Oramah stated that African countries still rely on fossil fuels for growth and sustainable development, hence the need to continue financing oil and gas development in the continent to avoid destabilising their economies. 

The Afrexim bank boss who was represented by the Director and Head Advisory and Capital Markets, Mr. Ibrahim Sagna, assured of the bank’s commitment to the African oil and gas sector.

He said the bank would continue to finance economically viable oil and gas transactions and would work with stakeholders to explore the feasibility of the Africa Local Content Development Fund. 

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Meanwhile, Executive Secretary of NCDMB, Simbi Wabote, in his welcome address, stated that the African oil-producing countries need to continue exploiting their hydrocarbon resources to fuel their developmental and economic activities, but their actions must be backed by an urgent strategy to address funding, investment, and technological challenges. 

He argued that the challenge of inadequate energy is partly the reason Africa is faced with poverty, conflicts, migration, brain drain and ranks very low on Human Development Index. 

He suggested that the African Export-Import Bank (AfreximBank), which supports several oil and gas deals in the continent, the African Development Bank (AfDB), and other funds from Development Financial Institutions (DFIs) in Africa could be explored for funding hydrocarbon development projects.

He also recommended that credible businessmen in the continent could also be motivated to pick interest in the industry, adding that “there must be a means of aggregating the various funds so that big-ticket funding transactions can be carried out.” 

Also commenting, the Secretary-General, African Petroleum Producers’ Organisation, (APPO), Dr. Omar Farouk Ibrahim, pointed out that a recent study commissioned by APPO on the future of the oil and gas industry in Africa in the Light of the Energy Transition revealed that the oil and gas industry in Africa would need a new development model to survive the energy transition.