AFC Supports Largest Gas- to-Methanol Plant of Africa

The Africa Finance Corporation (AFC), a leading infrastructure solutions provider, is facilitating the development of Africa's largest gas-to-methanol plant. This ambitious project aims to significantly reduce CO2 emissions by capturing and utilizing flared natural gas, transforming it into valuable methanol for use in solvents, paints, plastics, and automotive components. AFC's support will play a crucial role in driving this sustainable initiative and contributing to Africa's economic growth and environmental protection.   

The project in Akwa Ibom, Nigeria, aims to produce 1.8 million tonnes per annum (MTPA) of methanol, significantly diversifying the local economy and creating over 18,000 jobs. To support this initiative, AFC has provided development stage financing to mitigate risks and help the project achieve financial close. AFC is also offering financial advisory services to assist in securing the necessary project funding. Blackrose, a leading project development and investment firm, is at the forefront of this venture. The project is being developed in collaboration with another international development finance institution, which is also providing co-financing alongside AFC.

Nigeria holds Africa’s largest natural gas reserves, totaling 200 cubic feet, which represent a third of the continent's total. Despite this vast potential, a significant portion of these reserves remains untapped, offering a major opportunity to boost the country’s resource utilization and climate resilience. Historically, gas flaring has been a major issue, with the burning of excess gas from oil production emitting harmful chemicals that contribute to respiratory problems and other health concerns among local populations. Addressing these challenges through the development and utilization of natural gas could significantly improve environmental and public health outcomes in Nigeria.

Samaila Zubairu, President and CEO of AFC, highlighted how this groundbreaking project is turning Nigeria’s vast, untapped gas reserves into a significant advantage by positioning the country as a global leader in low-carbon manufacturing and energy solutions. By leveraging these reserves, the project aims to drive Africa’s transition to net-zero emissions, focusing on rapid industrialization, job creation, and socio-economic growth. The collaboration with Blackrose and IFC emphasizes the project's commitment to supporting sustainable development and advancing the local economy through the production of methanol, a versatile and environmentally friendly industrial feedstock.

The project will be executed in two phases, each with a capacity of 1.8 million tonnes per annum (MTPA). Phase one will focus on producing low-carbon methanol, a key industrial chemical used in the manufacture of numerous everyday products like solvents for pharmaceuticals, paints, plastics, automotive components, and construction materials. Additionally, this phase will provide a lower-emissions alternative fuel suitable for hard-to-decarbonize sectors such as shipping and industrial boilers, as well as applications in cooking stoves and fuel cells. Phase two will build upon this foundation by expanding production to include ammonia, which is essential for fertilizer manufacturing.

Once operational, the gas-to-methanol plant is anticipated to create over 2,500 direct jobs during its construction phase, while also generating an additional 16,000 indirect jobs, significantly contributing to local employment and economic growth.

Founded in 2007, the African Finance Corporation (AFC) is dedicated to driving sustainable economic growth in Africa through pragmatic infrastructure and industrial investments. Leveraging its specialized industry expertise, AFC offers comprehensive solutions including financial and technical advisory, project structuring, project development, and risk capital.