BGFI Bank’s Cameroonian subsidiary has been named the lead financial mobiliser for the construction of a modular refinery in the Kribi Port Zone, just months after Cstar and state-owned oil company SNH officially launched the project with a groundbreaking ceremony.
According to a financing mandate signed on November 4 by executives of the company that will develop the project, BGFI will raise over CFA115bn ($200m) to finance the building of the 30,000 b/d oil refinery
It will also act as the project’s agent bank, managing its financial and administrative operations throughout until commissioning.
The construction work of the refinery kicked off in July and is being carried out by the RCG Turnkey Solutions consortium in partnership with Global Process Systems (GPS) and Norinco International.
The project, estimated to cost a total of CFA115bn, is built on a 250-hectare site, which will also comprise a fuel storage terminal with a capacity of between 250,000 to 300,000 cubic metres.
It is the first major refinery project in Cameroon since the country’s 42,000 b/d Sonara plant was commissioned in the early 1980s.
After suffering a fire outbreak in 2019, Sonara has now become structurally inefficient in refining most of the country’s crude, leaving it to depend massively on fuel imports.
Only 15% of Cameroon’s heavy crude is said to have been refined locally in 2020 due to technical limitations and other constraints.
However, the planned Cstar refinery could reduce fuel imports by 30%, generating annual savings of around CFA400 billion, according to official estimates.
Cameroon’s national fuel demand is estimated at 1.9m t/yr, while its current storage capacity stands at about 270,000 cubic metres.
This translates to a gap of 200,000 cubic metres, compared to the national required stock of 470,000 cubic metres.
The new refinery is expected to help plug this gap and yield CFA141bn in yearly export revenues amid 7,000 direct and indirect jobs and local skills transfer.
In a related development, a consortium of investors recently unveiled plans to also site a $2bn, 125m t/yr mineral terminal in the Kribi Zone, which could position Cameroon as a key mineral export hub in Central Africa.