The government of Burkina Faso has finalised the acquisition of the Tema Multi-Purpose Terminal hydrocarbon depot in Ghana for $70 million.
This strategic investment aims to bolster the Burkinabè National Hydrocarbons Company (SONABHY) by increasing its fuel storage capacity and enhancing the country’s energy security. The move also aligns with the country’s need to diversify energy sources, reduce dependence on imported fuels, and improve access to modern energy, though challenges like electricity access and biomass reliance remain significant.
The purchase provides Burkina Faso, a landlocked nation, with direct access to a coastal fuel storage facility, ensuring a more reliable and efficient supply of hydrocarbons. The acquisition is expected to reduce logistical challenges and improve energy management for the country.
As a landlocked country, Burkina Faso lacks direct access to seaports, making it heavily dependent on neighbouring countries for importing petroleum products and other hydrocarbons. The hydrocarbon depot provides Burkina Faso with direct access to a coastal fuel storage facility, reducing reliance on transit through multiple countries and reducing logistical bottlenecks.
Between 2019 and 2020, only about 21% of Burkina Faso’s population had access to electricity, making it one of the world’s least-electrified countries. In rural areas, nearly all energy consumed is biomass-based, with 81% of the population relying on wood energy. The country’s over-reliance on biomass contributes to its growing environmental challenges, such as deforestation and air pollution from burning wood.
Burkina Faso’s poor transportation links and inadequate energy infrastructure constitute major barriers to energy security. The country’s landlocked status means transporting fuel across borders is costly, time-consuming, and vulnerable to disruptions, such as political instability in neighbouring countries. The acquisition of the Tema Multi-Purpose Terminal is a direct response to these challenges, intended to provide a more reliable and efficient supply chain for hydrocarbons, reducing transit risks and costs.
Apart from its landlocked status, a report by the African Development Bank’s (AfDB) Africa Energy Summit in Dar es Salaam, Tanzania in January, says Burkina Faso’s energy challenges also stem from poor access to electricity, with anational access rate of 26% as at 2023. Its energy profile reveals only 10% of the population uses clean cooking, while 86% still use traditional energy, such as firewood, charcoal and agricultural residues for energy consumption. There is insufficient production capacity, network instability, inadequate storage capacity and high fuel costs for electricity generation.
Several reports have also listed reliance on imported fossil fuels and biomass, poor infrastructure, and environmental/health impacts, especially in rural areas as major challenges.
The recent acquisition of the Tema Terminal demonstrates a strategic attempt to address some of these issues, particularly logistical and supply chain constraints. There is need for further investment and international cooperation to achieve long-term energy security and development, experts say. The Tema terminal purchase is an important start.
