Anibor Kragha, the Executive Secretary of the African Refiners & Distribution Association (ARDA), said during the opening of the 2023 ARDA Week Conference, which takes place from March 13–17 in Cape Town, that Africa needs to prioritize the development of refineries to ensure the maximum exploitation of local resources to achieve energy security.
Kragha gave a presentation titled “Balancing Energy Transition and Energy Security for the African Downstream” that shed light on how the African continent can maximize the development and exploitation of its energy resources to achieve energy security while at the same time ensuring the energy transition is fair and inclusive for the entire population.
Kragha looked at how the Russian-Ukrainian war and energy transition-related policies have brought attention to the necessity for Africa to prioritize infrastructure development and downstream investments in order to meet important energy concerns like rising demand and rising energy poverty. Kraghar claims that the Russian-Ukrainian conflict has demonstrated the need for both short-term solutions to the energy issue and long-term objectives of an energy transition.
Despite what has occurred globally, Kragha stated that energy demand in Africa will increase through 2040 as a result of population expansion and industrialization.
According to Kragha, the continent must balance security with the energy transition in order to achieve success “Our top priority right now is energy security. Although we do not pollute the most in the world, we are concentrating more on ensuring an uninterrupted, safe, and inexpensive supply of energy.”
Kragha discussed the need for the continent to attract new investments to modernize existing projects and accelerate the pace at which the continent is developing ongoing projects. Africa’s energy demand is expected to continue to grow significantly, and the continent is on track to overtake the United States as the world’s largest consumer of refined petroleum products.
“Storage and distribution infrastructure including pipeline and storage should be a focus. We cannot have the dialogue about refineries without storage,” stated Kragha.
With a lack of adequate investments hindering the growth of Africa’s downstream industry, Kragha commented on the various mechanisms being implemented and adopted by ARDA to support the development of downstream infrastructure. He stated that, “We want to make sure we have a finance plan to ensure projects are bankable. We want to engage with Afreximbank and the Africa Finance Corporation to ensure our members are able to be financed to produce cleaner fuels and the development of storage and distribution.”
“We are also developing a Liquefied Petroleum Gas Sector Development Fund with Standard Bank and other multilaterals to ensure the use of gas is optimized by our members to address local energy needs,” added Kragha.
Meanwhile, while Africa is prioritizing addressing increases in energy demand, Kragha emphasized that risks of heightened pollution will introduce new threats for economies, unless countries adopt cleaner fossil fuels. According to Kragha, “Africa’s growing demand must be met with cleaner fossil fuels. With fossil fuels set to continue to account for 60% of the demand, ARDA will continue to promote the exchange of best practices on energy sustainability among our members as well as champion investments across the downstream industry.”
While other blocs including Europe are prioritizing energy decarbonization, Kragha emphasized the importance for Africa to exploit its fossil fuel resources, which remain largely untapped, to be able to become a globally competitive economic zone and energy industry.
“We are not the biggest polluter in the world. Europe contributes the most emissions and Africa has only contributed 2.7%. If Africa is to execute all of its gas projects, there won’t be any heavy impact on global emissions. There is no one size fits for in energy sustainability and we need a just transition.”
However, Kragha emphasized that despite being the lowest emitter, Africa must continue to decarbonize its energy industry, stating that, “We need to demonstrate that we can deliver carbon credits across the downstream. What must Africa must do on a decade-by-decade basis is to decarbonize. By 2030 we need cleaner transport, clean cooking and power solutions.”
All this and more will be further unpacked during the 2023 edition of the African Energy Week (AEW) conference and exhibition, Africa’s premier event for the oil and gas industry. Under a mandate of making energy poverty history by 2030, AEW 2023 will connect investors and project developers with African policymakers, generating new capital for Africa’s burgeoning downstream sector. AEW 2023 is the African Energy Chamber’s annual energy conference, taking place in Cape Town from October 16-20.