Afc Secures Financing For Methanol Plant In Akwa Ibom, Expected To Create Thousands Of Jobs.

Emmanuel Addeh reporting from Abuja, Nigeria

Africa Finance Corporation (AFC), the leading infrastructure solutions provider in Africa, has announced its arrangement of a project development facility to support the construction of the largest gas-to-methanol plant on the continent. The initiative aims to reduce CO2 emissions by converting natural gas, which would have been flared, into valuable chemicals used for solvents, paints, plastics, and car parts.

The project, located in Akwa Ibom, Nigeria, plans to produce an initial 1.8 million tonnes per annum (MTPA) of methanol. In addition to diversifying the local economy, it is expected to generate over 18,000 jobs.

AFC has committed development stage financing to mitigate project risks and facilitate its completion. The organization is also providing financial advisory services to help secure the required project financing and ensure successful delivery of this transformative project.

The project is being led by Blackrose, a project development and investment firm, in collaboration with the International Finance Corporation (IFC), the private sector arm of the World Bank Group, and co-financed by AFC.

Despite Nigeria having the largest natural gas reserves in Africa, most of these reserves remain unexploited. Addressing this issue presents a significant opportunity to enhance the country’s natural resource beneficiation, bolster the economy, and improve climate resilience.

Gas flaring has been a major environmental and health hazard for local communities since the beginning of oil production, emitting harmful chemicals linked to respiratory and other health issues.

Commenting on the project, CEO of AFC, Samaila Zubairu, said: “This innovative project is effectively turning a major negative into a significant positive for Nigerians. By harnessing the country’s abundant gas reserves, we have a unique opportunity to become a global leader in low-carbon manufacturing and energy systems.”

Zubairu further emphasized AFC’s commitment to supporting Africa’s transition to net zero emissions by promoting rapid industrialization, job creation, and socio-economic advancement through the production of methanol, a versatile and low-carbon industrial feedstock.

The project will be implemented in two phases, each with a capacity of 1.8 MTPA. In the first phase, the plant will produce low-carbon methanol, which is used in the manufacturing of various everyday products such as solvents, paints, plastics, and automobile parts. It is also a lower emissions alternative fuel for hard-to-decarbonize sectors such as shipping and industrial boilers.

The second phase of the project will expand methanol production to include ammonia, critical for fertilizer production.

To ensure sustainable production, the plant will utilize energy-efficient methods, significantly reducing carbon intensity compared to traditional methanol synthesis techniques. Furthermore, the conversion of flared gas will reduce CO2 emissions. The project incorporates plans for carbon capture and offset strategies, as well as the use of external hydrogen, bringing it closer to carbon neutrality.

Upon completion, the gas-to-methanol plant is expected to create over 2,500 local jobs during the construction phase and an additional 16,000 jobs indirectly, contributing to increased manufacturing activity and economic diversification.

AFC, which has 43 member countries, has invested $13 billion across Africa since its inception.