Can the African Energy Bank Transform the Continent's Refining and Downstream Future?
Set to launch in June 2025 with an initial $5 billion in capital, the African Energy Bank (AEB) is positioned to catalyze a shift in Africa's energy sector. Established by the African Petroleum Producers' Organization (APPO) in partnership with multilateral financial institution Afreximbank, the AEB aims to mobilize capital for upstream, midstream and downstream energy projects, addressing a continent-wide investment shortfall estimated at up to $50 billion annually. By providing accessible, Africa-focused financing, the AEB is expected to reduce dependency on foreign capital and imports, especially in the downstream sector where over 80% of refined petroleum products are currently imported.
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.
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