Fairfax Africa Fund plans to build $4 billion oil refinery in Ethiopia
Fairfax Africa Fund, a US-based investment firm, in collaboration with multiple partners from Asian countries is planning to build an oil refinery in Ethiopia with a total investment cost of four billion US dollars.
Zemedeneh Negatu, Global chairman of Fairfax Africa Fund, told The Reporter that his company has undertaken the feasibility study.
According to Zemedeneh, Fairfax Africa Fund is working on the project with Asian investors whose core business is oil trading and infrastructure development. “Our initial plan was for our investors to be from Asia but more recently, we were approached by American financiers who are interested in the project. So, we may end up with financiers both from Asia and the US,” he told The Reporter.
The investors have evaluated several places including Djibouti where the oil refinery will be built and finally selected Awash town, 221km east of Addis Ababa. Awash is found in the Afar Regional State in the Ethio-Djibouti corridor where the national fuel depot of the Ethiopian Petroleum Supply Enterprise is located. “Awash is selected as the ideal place by the authorities,” Zemedeneh said.
According to him, initially, the refinery will have the capacity of processing six million metric tons of crude oil, equal to approximately 120,000 barrels per day. Ethiopia currently uses three million metric tons of fuel annually. The refinery’s capacity will eventually be expanded to 12 million metric tons per year. The total investment cost is estimated at four billion dollars.
The planned refinery will serve the East African market. “It will primarily serve Ethiopia. It is part of Ethiopia’s energy security program. The refinery will also cater the needs of other East African nations,” Zemedeneh said.
Fairfax held preliminary discussions with the Ministry of Mines, Petroleum and Natural Gas, the Ethiopian Petroleum Supply Enterprise (EPSE) and various other government organizations. The discussions are still at the early stages. But, based on these early discussions, we have already identified a couple of suitable locations within Ethiopia for the refinery. We plan to present a more detailed business proposal to the government authorities later this year,” Zemedeneh said.
Read more at: The Reporter
