Business
Sahara Group Plans $1bn LPG Investment In Nigeria, Others
An energy and infrastructure conglomerate, Sahara Group, says it will invest over $1bn to enhance access to Liquefied Petroleum Gas in Africa and emerging economies in a bid to boost energy transition on the continent.
The Executive Director, Sahara Group, Temitope Shonubi, disclosed this at the African Refiners and Distribution Association Conference 2021 in South Africa where he spoke on the role of LPG in Africa’s energy transition, according to a statement.
“Sahara, through its subsidiary, WAGL Energy Limited is already working towards investing $1bn to ramp up its LPG fleet and terminal infrastructure over the next five years. In addition to the vessel fleet, Sahara is in the process of building over 120,000 metric tonnes of LPG storage in 11 countries,” he said.
According to him, the countries earmarked for the storage tanks include Nigeria, Senegal, Ghana, Cote d’Ivoire, Tanzania and Zambia, whose process has commenced, and five others in the preliminary stage.
He said the firm continued to lead efforts geared towards seamless energy transition in Africa through innovative energy solutions via its upstream, midstream, downstream and power businesses including partnerships with the United Nations Development Programme and other leading organisations.
Shonubi noted that Africa had become reliant on imports to meet its LPG demand as a result of low crude oil refining capacity and the absence of adequate wet gas being processed
He said, “Africa’s refining capacity of 3,343,000 barrels per day is limited to just 20 countries; utilisation rates have fallen from about 75 per cent in 2010 to 55 per cent in 2020. Only six African nations have combined LPG storage capacity greater than 50,000MT.
“Economic progress is key to harnessing Africa’s latent LPG demand to boost economic performance”.
He lamented that Africa accounted for just four per cent of global LPG consumption last year.
LPG consumption in Africa is low compared to other markets. Africa’s consumption was 14MT (translating to 12 kilogram per person) in 2020, compared to Asia Pacific’s108MT ((27kg/person), North America’s 74MT (123kg/person), Europe & Eurasia’s 49MT (49kg/person), Middle East’s 38MT (60kg/person) and Latin America’s 34 MT (53kgs/person).
Shonubi attributed the low LPG consumption in Africa to the hurdle of affordability, absence of large-scale LPG storage infrastructure, minimal vessels dedicated to the region, low set-up cost of firewood and kerosene stoves, as well as negative perceptions and fear of explosions due to poor safety standards, among other factors.
The facility will be disbursed through participating Microfinance Institutions (MFIs), which will in turn extend the loans to their customers, particularly SMEs, as they directly interface with businesses at the grassroots level.
The Executive Director of COMCIN, Mr. Micheal Ogbaa who represented the Chairman, Dr. Iredele Oyedele (FCA, FCCA), said the initiative is designed to strengthen micro-lending institutions and expand access to finance for grassroots entrepreneurs, particularly women and youths in the informal sector.
Ogbaa explained that COMCIN does not lend directly to individuals but works through its network of microfinance and cooperative institutions, which in turn provide loans to end users.
“We came together to advocate for the microfinance ecosystem. Commercial banks often exclude people at the grassroots, but our members are positioned to reach them. This facility will empower them to do more,” he said.
He noted that the loan scheme offers low interest rates and flexible repayment plans, making it more accessible to small business owners.
According to him, about 90 percent of beneficiaries are expected to be women, who play a key role in sustaining families and driving economic activities at the local level.
“Our focus is on traders, service providers, and players in the informal sector. These are the real movers of the economy. By supporting them, we are strengthening families and contributing to national development,” he added.
Ogbaa disclosed that eligible SMEs with proven integrity and business track records could access up to N5 million each through participating micro-lending institutions. The rollout has commenced in Lagos and will extend to Abuja, Enugu, and other regions, including the South-West, South-East, and North-East.
He said 12 micro-lending institutions have already benefited from the scheme, while 85 applications are currently being processed under the pilot phase.
“Our target is to reach at least 100,000 SMEs nationwide. We are building a platform that connects funding partners with credible micro-lending institutions, creating a reliable channel for financial inclusion,” Ogbaa said.
He added that COMCIN is also working to attract larger funding pools from development finance institutions and private investors, noting that successful implementation of the pilot phase would boost confidence and unlock more capital for SMEs.
“We have seen encouraging testimonies from early beneficiaries. As we demonstrate transparency and efficiency, more institutions will be willing to channel funds through us,” he said.
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