By Patience Chat Moses
Ahead of the 2024 African Energy Week (AEW), the African Energy Chambers (AEC) will host a session on Liquified Petroleum Gas (LPG) value chains, focusing on expanding access and promoting sustainable cooking solutions across Africa.
This was revealed by the Executive Chairman of the African Energy Chamber, NJ Ayuk who noted that as a clean cooking fuel, LPG provides a tangible solution to mitigating risks associated with using other bio fuel.
According to him, the development came after the Global LPG Partnership (GLPGP) and the African Refiners & Distributors Association (ARDA) announced a $1.5 billion fund dedicated to supporting clean cooking initiatives across the continent.
He revealed that the fund aims to accelerate the adoption of LPG as a primary cooking fuel, addressing the urgent need to reduce the reliance on biomass, which remains prevalent across Africa.
The GLPGP-ARDA fund is expected to provide financing for infrastructure development, distribution networks and consumer education programs, facilitating broader access to LPG and promoting sustainable cooking practices.
Ayuk explained that the AEW session on LPG, titled the Elimination of Energy Poverty: LPG Value Chains for the African Clean Cooking Crusade” will explore how investments in LPG utilization and distribution can catalyze energy security in Africa.
The session, he said will also provide an overview of innovative financing tools applicable to LPG markets, with insights from industry experts including Spark Africa Fund’s Partner and Investment Director Peter George; LPG Association of South Africa’s (LPGSA) Managing Director Gadibolae Dihlabi; and Oryx Energies’ Managing Director Pam Indurjeeth.
He stated that LPG serves as a vital solution for improving access to clean, affordable and reliable energy in Africa, and recent advancements across the continent aim to bolster the penetration of LPG in domestic markets.
The International Energy Agency (IEA)– which declared 2024 as the year for achieving universal access to clean cooking mobilized $2.2 billion in public and private sector funding during a summit in Paris this year.
The financing supports the adoption of clean cooking solutions such as LPG and accounts for half of the continent’s financial needs to achieve universal access.
LPG Projects Across Africa
The AEC chief executive made reference to few LPG Projects going taking place in Africa.
He said that LPG stands to transform Africa’s energy sector, bringing cost-effective and reliable energy to millions of people.
In Gabon, independent oil and gas company Perenco launched its Batanga LPG plant in December 2023, representing the second phase of its $50-million gas development project which is set to produce 15,000 tons of LPG.
Similarly, Kenya has positioned itself as a regional LPG hub with the inauguration of a new facility in Mombasa.
Notably, LNG distributor Taifa Gas began constructing a $130-million, 30,000-metric-ton LPG storage facility in the Dongo Kundu Special Economic Zone in Mombasa last December.
This facility is set to reduce East Africa’s dependency on imported LPG, ensuring a more reliable and affordable supply for households.
Coming down to North Africa, Algeria, he said is the continent’s largest LPG producer and has advanced its LPG capabilities through a $740-million contract between national oil company Sonatrach and multinational TotalEnergies for extraction operations at the Tin Fouye-Tabankort fields.
Also, Egypt, Africa’s third-largest LPG producer, has enhanced its infrastructure with the development of the $732-million Western Gas Complex.
Scheduled to become operational later this year, the facility will significantly increase Egypt’s LPG production capacity to address the country’s growing energy needs.
Ayuk added that progress is being made to boost capacity building across the LPG industry.
In west Africa, Nigeria has partnered with Saudi Arabia to enhance LPG accessibility through the National Human Capacity Training Program for the Adoption of LPG.
The initiative, led by Saudi Arabia’s Oil and Sustainability Program in collaboration with Nigeria’s Ministry of Petroleum Resources, focuses on developing micro-distribution points in Nigeria’s Edo State and establishing training facilities for local communities.
The program aims to increase LPG availability while reducing health risks associated with burning wood or coal for cooking.
The partnership is part of Nigeria’s broader strategy to reduce reliance on biomass and promote cleaner cooking solutions.
Ayuk revealed that financial institutions are also advancing LPG activities in Africa.
A notably partnership is the one between the International Finance Corporation (IFC) and Cameroonian energy retailer BOCOM Petroleum aimed at enhancing LPG access in rural areas, aiming to replace traditional biomass with cleaner energy alternatives and improve public health.
The IFC he said, is supporting this initiative with a €50 million financing package, which will fund the expansion of BOCOM’s main LPG storage facility and the construction of new regional distribution hubs across Cameroon.
Additionally, the African Development Bank (AfDB) pledged $2 billion over the next decade to promote the adoption of clean cooking solutions.
He identified that the commitment of AfdB equates to an annual investment of $200 million, and aims to achieve universal access to clean cooking by 2030.
The funding will support various solutions, including LPG, gas-to-power and biogas.
“LPG stands to transform Africa’s energy sector, bringing cost-effective and reliable energy to millions of people.
” The continent’s reliance on biomass has not only imposed risks associated with security of energy supply but has resulted in a continent-wide health crisis”, he said.
During AEW: Invest in African Energy, the LPG session will explore the contributions of large consumers and regional markets, highlighting how LPG facilities are crucial for achieving economies of scale within the industry.
Additionally, the potential of carbon credits and climate finance to drive growth in Africa’s LPG sector will be evaluated, with government policies analyzed for their role in accelerating the development of sustainable LPG ecosystems.
Valuechain reports that thhe AEW is scheduled for November 4-8 in Cape Town.