Nigeria to become a leader in low-carbon manufacturing

Africa Finance Corporation (AFC), a leading infrastructure solutions provider, has announced that it is arranging a project development facility to support Africa’s largest gas-to-methanol plant

The aim of the project (located in Akwa Ibom, Nigeria) is to significantly reduce CO₂ emissions by offsetting flaring of natural gas and turning it instead into a valuable chemical for solvents, paints, plastics and car parts. It will target producing an initial 1.8mn tonnes per annum (MTPA) of methanol and is expected to generate more than 18,000 jobs. Moreover, it will allow the West African country to minimise the environmental impact of exploiting its vast natural gas reserves, assumed critical to the economic development of the country.

“This innovative project is transforming an immense negative for Nigerians into a very significant positive by harnessing this country’s abundant gas reserves as a unique opportunity to become a global leader in low-carbon manufacturing and energy systems,” said Samaila Zubairu, president and CEO of AFC. “This strategic collaboration with Blackrose and IFC underscores our dedication to supporting Africa’s pragmatic transition to net zero, emphasising rapid industrialisation, local job creation, and socio-economic advancement through the production of methanol, a versatile and low-carbon industrial feedstock.”

AFC has committed development stage financing to de-risk the project and enable it reach financial close, along with providing financial advisory services to the sponsors to raise the required project financing and support successful delivery of this transformational project. The venture is led by Blackrose, a project development and investment firm, and co-developed with the International Finance Corporation (IFC), the private sector arm of the World Bank Group, which are co-financing alongside AFC.

A global leader in low-carbon manufacturing

According to AFC, the project will be implemented in two phases. The first phase will produce low-carbon methanol, a chemical essential to the manufacturing of hundreds of everyday products and a lower emissions alternative fuel used in hard-to-decarbonise sectors.

Phase two of the project will expand methanol production to include ammonia, a critical feedstock for fertiliser production. Both phases will have an installed capacity of 1.8MTPA.

By utilising best-in-class energy efficient production methods, the plant will achieve a much lower net carbon intensity compared to traditional methanol synthesis techniques, while also reducing CO₂ emissions by converting gas that would otherwise have been flared. Additionally, the project incorporates plans for carbon capture and offset strategies as well as the use of external hydrogen to bring targets even closer to carbon neutrality.