Afreximbank in talks to help raise $500m for Senegal refinery upgrade

The African Export-Import Bank (Afreximbank) is in advanced discussions with Senegal’s sole oil refiner to help raise $500 million in syndicated finance a further upgrade of its old refinery, a senior bank official said on Tuesday. Société Africaine de Raffinage (SAR) is West Africa’s oldest refinery and recently underwent an upgrade to boost production to 1.5 million tonnes a year from 1.2 million tonnes a year.

The new upgrade would bring production to between 4 million and five millions tonnes a year, with a focus on cleaner fuels, SAR director general Marieme Ndoye Decraene told Reuters. A shortage of oil refineries across sub-Saharan Africa coupled with volatile crude prices because of the war in Ukraine has left countries dangerously short of fuel supplies, disrupting airlines and causing queues at filling stations. Senegal is looking to make use of newly discovered oil and gas fields and wean itself off imported petroleum products.

“Afreximbank… is working with the Senegalese refinery company SAR to explore financing options for the refinery upgrade which is estimated at $500 million,” Rene Awambeng, global head of client relations at Afreximbank, told Reuters on the sidelines of an African refinery and distributors conference in Cape Town. “Afreximbank is in advanced discussions to take a mandate, fundraising and advisory role from SAR to syndicate this project finance facility,” he said, adding that a final decision was expected in the next three to four months. The SAR refinery, which has been revamped to cater to local Senegalese crude after relying almost exclusively on Nigerian oil, provides around 55% of domestic needs and the country imports the rest, said SAR’s Ndoye Decraene. “We need to blend it with other Nigerian crude because our crude has a lot of sulphur,” she said, adding that the refinery will use a blend of 75% Senegalese crude and 25% other. Reuters