The African Refiners and Distributors Association (ARDA) has said Nigeria and other African countries will need about $15.7bn to upgrade the existing 36 refineries on the continent. ARDA said the fund would be needed for the refineries to be able to produce petroleum products that would conform to a planned level of sulphur content.
It said in a statement on Thursday that the $15.7bn would be needed for the engineering, procurement and construction processes for the upgrade of the facilities.
The African Union and ARDA had planned an initiative called AFRI-6, which aimed at reducing sulphur content in fuels to 10 parts per million in the coming years.
In his address at a workshop organised by ARDA with the theme, ‘Upgrading African refineries to produce cleaner fuels,’ the association’s Executive Secretary, Anibor Kragha, said West and Central Africa with 12 refineries would need $6.28bn capital expenditure for refineries upgrade.
He said North Africa with 17 refineries would require capital expenditure of $5.95bn, while East and Southern Africa with seven refineries would need $3.42bn.
Kragha said without urgent steps on adopting uniform fuel specifications across the continent, health and environmental challenges could worsen existing problems on the continent.
“Cleaner, harmonised, pan-African fuels specifications are required and there has been uneven progress in tightening fuel specifications across the continent,” he said.
He said the African Union and ARDA were collaborating on adoption of AFRI Fuels Roadmap and outlined new process units required to improve key fuel specifications.
According to Kragha, the process units include naphtha hydrotreater, diesel hydro-desulphurisation, benzene extraction, sulphur and hydrogen plants.
He said, “Major urban population growth would result in increased pollution. So orderly, sustainable transition to cleaner fuels remained imperative to address potential public health issues.
“Targeted financing is needed for projects to upgrade refineries and infrastructure to produce and transport cleaner fuels.”
On his part, an investment professional at the African Finance Corporation, Ufuoma Adasen, noted that while access to long-term financing at competitive rates remained a challenge, phased project implementation could represent a way forward.