The new $4 billion oil refinery in Awash would import crude through neighboring Djibouti and along a railway recently completed by Chinese state enterprises, according to Fairfax Africa Fund.
By Paul Burkhardt & Nizar Manek (Bloomberg)
Ethiopia’s fast-growing economy has Asian investors lining up to build a new $4 billion oil refinery, even as a Blackstone Group LP-backed fuel pipeline project is shelved.
The proposed 120,000 barrels-a-day plant has generated interest from Japanese, South Korean and Indian investors, said Zemedeneh Negatu, chairman of U.S.-based Fairfax Africa Fund. The refinery in Awash, east of the capital Addis Ababa, would import crude through neighboring Djibouti and along a railway recently completed by Chinese state enterprises, he said.
The Asians are “very excited,” said Zemedeneh, declining to name the potential investors who have signed memorandums of understanding. “Some are big commodity trading houses.”
Half of the refinery’s output would be directed to the Ethiopian market, with the remainder exported to neighboring countries in East Africa, according to Zemedeneh. Fairfax Africa Fund has plans to eventually double the plant’s capacity amid industrial expansion and increased demand for motor vehicles.
Ethiopia recorded annual average economic growth of about 10 percent over the past decade, and the International Monetary Fund (IMF) estimates expansion at 8.5 percent in the current fiscal year.
There has also been interest from a U.S. financial firm in a project in which the Ethiopian government would be the sole fuel distributor, Zemedeneh said.
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