Angola’s state-owned oil company Sonangol, and its partner Gemcorp (GHL), have reached financing closing for a modular refinery near Cabinda, Angola, with a $335m financing facility.

The financing facility was led by Africa Finance Corporation (AFC), African Export-Import Bank (Afreximbank), and a consortium of international and local financial institutions.

Other lenders include The Industrial Development Corporation (IDC) of South Africa, The Arab Bank for the Economic Development in Africa (BADEA) and Banco de Fomento Angola (BFA).

With $138m of equity already provided by the project sponsors, current financing accounts for nearly 71% of the $473m cost for the Cabinda oil refinery.

The financing facility covers the first phase of the project and enables the construction of the project, which will enable the processing of 30,000 crude oil barrels per day.

The second phase, which is expected in due course, is expected to add another 30,000 crude oil barrels per day, bringing the refinery’s total capacity to 60,000 barrels per day.

Gemcorp CEO Atanas Bostandjiev said: “The project stands to make Angola energy independent while leveraging its natural resources for the benefit of the community and the wider economy.

“We have benefitted immensely from the local expertise made possible by working closely with the Sonangol team and our partners, Africa Finance Corporation and Afreximbank, who share our vision to deliver this monumental life-changing infrastructure.”

Upon completion of the first phase, the refinery is anticipated to deliver around 10% of the country’s total demand for refined oil products.

The refinery is expected to account for up to 20% upon completion of the second phase, while creating over 1,300 direct and indirect jobs in the process.

According to Gemcorp, around 300,000 man-hours of training have been completed for the upskilling of local employees, with 1,000,000 man-hours worked on the project.

The project financing is expected to play an important role in Angola’s energy security and deliver local employment opportunities while expanding technological capabilities.

Africa Finance president and CEO Samaila Zubairu said: “Cabinda Refinery will generate significant employment opportunities which will help to build the skilled workforce of the future. It will save valuable foreign exchange and enhance Angola’s balance of payments.

“It will create spin-off industries that rely on the output of the refinery thereby boosting the economy and driving long-term economic growth. We look forward to collaborating with stakeholders to continue driving forward the sustainable development of our continent.”

Afreximbank president and board of directors chairman Benedict Oramah said: “The establishment of a modular oil refinery in Cabinda will add critical value to Angola’s main commodity and its largest export product, while contributing to a reduction in greenhouse gases by reducing the need to transport crude and refined products to and from Africa.”