African Refiners and Distributors Association (ARDA) has said that displacing charcoal with clean cooking would cost Africa about $7.5 billion for downstream infrastructure and stoves.
Stressing that the continent remains the lowest in per
capita Liquefied Petroleum Gas (LPG) consumption despite huge resources, ARDA
which disclosed this at an LPG Virtual Workshop, stated that Africa must take
advantage of its resources for growth.
Executive Secretary of ARDA, Anibor Kragha, who spoke on the
occasion, said that while Sub-Saharan Africa has 14.4 per cent of world’s
population , it has less than 1 per cent of global LPG consumption. “Many
countries have little or no bulk handling facilities,” Kragha said.
But he noted that LPG consumption in Africa has more than
doubled since 2010, noting that the consumption recorded 9.7 per cent annual
growth rate over the past decade.
While stressing that Nigeria remains largest LPG consumer,
Kragha said LPG is fastest-growing petroleum product in Sub- Saharan Africa.
In his remarks, Vice President, LPG, Europe, Middle East and
Africa at Argus, David Appleton said LPG remains critical to energy security in
Africa, explaining that safety, pricing, culture and finance are critical to
the growth of the sector in Africa.
Appleton stated that investors in the sector needed returns,
adding that there must a way to de-risk investment as much as possible, while
the continent must think about long term investment, as well as regulatory
progress and consistency.
Senior Associate, Investments, African Finance Corporation,
Moussa Dabo, who disclosed at the event that the firm has invested $10.5
billion across 36 countries in Africa said there was need to improve governance
and institution for Africa to attract investment.
Dabo noted that lenders were more comfortable lending to
organisations that are willing to establish the best-in-class business
practices, adding that stability and practicability of cash flow could
significantly help reduce cost of financing while driving more investment into
LPG.
“Securing favourable, diversified and long term supply
contracts with established global traders is necessary,” he said, urging
players in the sector to recalibrate their
capital structure before seeking financing. He noted that equity injection in
the business could help lower financing cost.
In a slide by Wagl Energy Limited, stakeholders at the
company noted that the potential for LPG consumption in Africa could improve if
the continent is committed to solving challenges in the areas of gas production
that prioritize local market, shipping and storage as well as distribution to
other end users.