African Development Bank and JGC Advance Sustainable Aviation Fuel in Africa

African Development Bank and JGC Corporation Partnership: Catalyzing Sustainable Aviation Fuel Development Across the African Continent

The African Development Bank (AfDB) and Japan’s JGC Corporation have forged a strategic partnership through a Letter of Intent that represents a pivotal moment in Africa’s journey toward sustainable aviation and decarbonization of the continent’s rapidly growing air transport sector. This collaboration addresses the critical need for SAF development across Africa while positioning the continent as an integral part of the global sustainable aviation value chain. The partnership comes at a time when the aviation industry faces mounting pressure to achieve net-zero carbon emissions by 2050, as established by the International Civil Aviation Organization (ICAO), while Africa’s aviation market demonstrates remarkable growth potential with passenger traffic projected to reach 345 million annually by 2043. The agreement encompasses comprehensive collaboration on SAF projects, technology transfer, market assessment, and financing solutions, with the AfDB facilitating coordination with public-sector aviation stakeholders and JGC Corporation conducting demand studies and technical assessments suited to local resources and infrastructure.

This partnership is significant because it not only aligns with global decarbonization targets, but also addresses the unique challenges and opportunities present in Africa. As the continent’s aviation sector expands, the adoption of SAF is positioned as a key strategy for both mitigating environmental impacts and fostering economic growth. The partnership leverages the AfDB’s extensive network and development finance experience alongside JGC’s expertise in sustainable energy technologies, aiming to catalyze a new era of Green-Aviation across Africa.

The context for this agreement is shaped by Africa’s rapidly increasing air travel demand, persistent infrastructure challenges, and the urgent need for environmentally responsible growth. The collaboration between AfDB and JGC Corporation seeks to provide a holistic solution, encompassing technical, financial, and policy dimensions, to advance SAF production and adoption, thereby supporting both local economic development and global climate objectives.

Background and Context of African Aviation Development

Africa’s aviation sector has emerged as a critical component of the continent’s economic development, with the industry demonstrating resilience and remarkable growth potential despite facing unique challenges. The African aviation market has shown extraordinary momentum, with annual passenger traffic growing by 13.2% in 2024, reaching an estimated 98 million passengers, and projections indicating the market will connect 345 million passengers annually by 2043. This growth trajectory positions Africa as one of the fastest-expanding aviation markets globally, driven by economic development, increasing urbanization, and the need for connectivity across the continent’s vast geographical expanse.

The continent’s aviation infrastructure serves diverse connectivity needs, with domestic travel accounting for 37% of passenger traffic, intra-African routes comprising 31%, and intercontinental routes making up 32% of the market. This distribution reveals significant opportunities for regional aircraft and sustainable fuel solutions, particularly for shorter to medium-haul routes that connect secondary cities and foster greater regional integration. The recovery from COVID-19 impacts has been particularly notable, with African Airlines achieving Revenue Passenger Kilometres (RPKs) climbing 2.06% above 2019 figures by January 2024, while Available Seat Kilometres (ASKs) increased by 7.1%.

However, Africa’s aviation sector faces substantial environmental challenges that make sustainable fuel development particularly urgent. The continent’s airlines often operate older aircraft fleets, resulting in lower jet fuel utilization rates and higher emissions intensity compared to more developed aviation markets. Research conducted on African international routes from 2019 to 2021 revealed significant carbon emissions, with studies highlighting that relatively poor countries bear substantial carbon transfer burdens in international aviation. This environmental challenge is compounded by the rapid growth in air travel demand, making the development of sustainable aviation fuels not just an environmental imperative but also an economic necessity for the continent’s long-term aviation sustainability.

“Adopting SAF in Africa is a crucial component of the journey to cutting the continent’s carbon dioxide emissions while boosting sector competitiveness.” , AfDB President Dr. Akinwumi Adesina

The Strategic Partnership: AfDB and JGC Corporation Collaboration

The Letter of Intent signed between the African Development Bank and JGC Corporation represents a comprehensive approach to sustainable aviation fuel development that leverages the complementary strengths of both organizations. Under this strategic arrangement, the AfDB will serve as the facilitator and coordinator for public-sector aviation stakeholders across the continent, utilizing its extensive network that spans 41 African countries and its deep understanding of regional development needs. The Bank’s role extends beyond mere coordination to include identifying potential project pipelines, exploring diverse financing options including feasibility study support, and promoting Investments opportunities that can attract both public and private capital to SAF development initiatives.

JGC Corporation brings to this partnership its extensive expertise in engineering, procurement, and construction, particularly in energy and infrastructure projects, along with its proven track record in sustainable fuel technologies. The Japanese company will conduct comprehensive demand studies for SAF in African markets, assessing both current needs and future projections based on the continent’s aviation growth trajectory. These studies will be crucial in determining the optimal scale and location of SAF production facilities, taking into account local feedstock availability, infrastructure capabilities, and proximity to major aviation hubs across the continent.

The technical assessment component of JGC’s contribution involves evaluating deployment opportunities that are specifically suited to local resources and infrastructure conditions. This approach recognizes that Africa’s diverse geographical and economic landscape requires tailored solutions rather than one-size-fits-all approaches to SAF development. JGC’s experience in plant engineering and sustainable energy, particularly through its work on projects like the SAF production facility in Japan using Honeywell UOP Ecofining technology, provides valuable technical expertise that can be adapted to African conditions.

“Building global Partnerships around SAF production in Africa is essential for scaling SAF production to levels that can meaningfully impact aviation emissions while creating economic opportunities across the continent.”

Market Context and Growth Opportunities in African SAF Development

The sustainable aviation fuel market presents substantial growth opportunities within Africa, driven by both global decarbonization mandates and the continent’s rapid aviation sector expansion. The global SAF market was valued at USD 1.61 billion in 2024 and is projected to reach USD 25.62 billion by 2030, representing a compound annual growth rate of 65.5%. Within this global context, the Middle East and Africa region specifically shows remarkable potential, with the sustainable aviation fuel market expected to reach EUR 465.34 million by 2029, growing at a CAGR of 40.7%.

The World Bank’s comprehensive study on SAF production potential in Africa reveals that while higher selling prices for SAF are driven by elevated risk premiums and green premiums, the continent’s feedstock availability and emerging policy frameworks create substantial opportunities for cost-competitive SAF production. Corporate willingness to pay for sustainable aviation fuel has emerged as a crucial market driver, with recent surveys indicating that airlines, logistics service providers, and corporate customers are willing to pay green premiums for SAF. This willingness, when combined with production costs, creates potential for bankable projects, particularly for the Hydroprocessed Esters and Fatty Acids (HEFA) pathway.

Regional integration initiatives across Africa also support SAF market development, with increasing cooperation between African countries creating opportunities for cross-border SAF supply chains and shared infrastructure development. The African Continental Free Trade Area and other regional economic partnerships provide frameworks for coordinating SAF production and distribution across multiple countries, potentially achieving economies of scale that would be difficult for individual nations to accomplish independently.

Technology Pathways and Production Methodologies for African SAF

The technological landscape for sustainable aviation fuel production offers multiple pathways that can be adapted to African conditions and resource availability. JGC Corporation’s expertise encompasses several proven production technologies, with particular strength in the Hydroprocessed Esters and Fatty Acids (HEFA) pathway, which has demonstrated commercial viability through projects like the company’s collaboration with Cosmo Oil using Honeywell UOP Ecofining technology. This technology pathway is particularly relevant for Africa given its ability to process locally available feedstocks such as used cooking oil, agricultural residues, and animal fats.

Fischer-Tropsch Synthetic Paraffinic Kerosene (FT-SPK) represents another significant technology pathway that could be particularly relevant for African markets with abundant biomass resources. This process can convert various forms of biomass and waste materials into high-quality aviation fuel, providing flexibility in feedstock selection based on regional availability. Alcohol-to-Jet (AtJ) technology offers additional possibilities, especially in countries with established ethanol production capabilities or abundant sugar crops.

Advanced biofuel production technologies continue to evolve, with production costs remaining higher than conventional jet fuel, but ongoing technological improvements and economies of scale are expected to drive costs down over time. JGC’s approach to technology transfer emphasizes adapting proven technologies to local conditions and resources, recognizing that African SAF production facilities will need to account for factors such as local feedstock characteristics, seasonal availability variations, and infrastructure limitations.

Economic and Financial Dimensions of African SAF Development

The financial landscape for sustainable aviation fuel development in Africa presents both significant opportunities and complex challenges that require careful analysis and strategic planning. The economic viability of SAF projects depends on multiple factors including feedstock costs, production technology selection, scale of operations, and market demand characteristics. The African Development Bank’s role in this partnership extends to exploring diverse financing options that can make SAF projects economically viable despite the higher initial capital requirements compared to conventional fuel production facilities.

Corporate willingness to pay premium prices for sustainable aviation fuel has emerged as a critical factor in project economics. This willingness to pay reflects growing corporate commitments to reducing Scope 3 emissions and achieving net-zero targets, creating market conditions that support SAF project financing. Airlines and corporate customers increasingly view SAF purchases as investments in long-term operational sustainability rather than simply fuel procurement decisions.

The financing structure for African SAF projects will likely require blended finance approaches that combine development finance institution funding with private sector investment and potentially government support. Revenue diversification, through the co-production of renewable diesel and other high-value chemical products, can improve overall project economics. Exchange rate considerations and local currency financing present additional complexity, making the AfDB’s experience in managing currency risks particularly valuable.

Policy Framework and Regulatory Environment for African SAF

The regulatory landscape for sustainable aviation fuel development in Africa is shaped by both international commitments and domestic policy frameworks that are evolving to support decarbonization of the aviation sector. The International Civil Aviation Organization’s adoption of a long-term aspirational goal of net-zero carbon emissions by 2050 for international aviation provides the overarching framework driving SAF development globally.

The European Union’s support for SAF development in Africa through its Global Gateway initiative demonstrates how international policy frameworks can catalyze regional development. The ReFuelEU Aviation programme provides a relevant model for understanding how regulatory mandates can drive SAF adoption, requiring minimum SAF blending mandates that start at 2% and increase to 70% by 2050. While this regulation applies specifically to EU airports, its impact extends globally as international airlines serving European routes must comply with these requirements.

National policy frameworks across Africa are beginning to address sustainable aviation fuel development, with countries like South Africa, Nigeria, Kenya, and Ethiopia leading efforts to establish supportive regulatory environments. Carbon pricing mechanisms and emissions trading systems represent important policy tools that can improve the economics of SAF projects by monetizing the carbon reduction benefits. Regional harmonization of SAF standards and Regulations could significantly reduce compliance costs and facilitate cross-border trade in sustainable aviation fuel.

Challenges and Barriers to SAF Development in Africa

Despite the significant opportunities for sustainable aviation fuel development in Africa, multiple challenges and barriers must be addressed to achieve successful implementation of SAF projects across the continent. Infrastructure limitations represent one of the most significant challenges, as many African countries lack the sophisticated refining and fuel distribution infrastructure required for large-scale SAF production and distribution.

Feedstock availability and supply chain development present complex challenges that vary significantly across different African regions. While the continent possesses abundant biomass resources and agricultural waste that could serve as SAF feedstock, developing reliable supply chains that can provide consistent quality and quantity of materials throughout the year requires substantial coordination and investment.

Technical capacity and skills development represent critical barriers that must be addressed through comprehensive training and technology transfer programs. Regulatory uncertainty and policy inconsistency across different African countries create additional risks for SAF project development, particularly for projects that may serve regional markets spanning multiple jurisdictions. Market demand uncertainty represents another significant challenge, as the relatively small size of domestic aviation markets in many African countries may not provide sufficient demand to support large-scale SAF production facilities operating at efficient scales.

International Cooperation and Global Partnership Development

The development of sustainable aviation fuel capabilities in Africa requires extensive international cooperation and strategic partnerships that can leverage global expertise, financing, and market access opportunities. The AfDB-JGC partnership represents a model for South-South cooperation that combines African development finance expertise with Japanese technological capabilities and industrial experience.

The European Union’s engagement with African aviation authorities through the Global Gateway initiative illustrates how international partnerships can address multiple development objectives simultaneously. Technology transfer partnerships extend beyond the immediate AfDB-JGC collaboration to include broader networks of technology providers, equipment manufacturers, and engineering services companies. These technology partnerships are crucial for ensuring that African SAF facilities utilize state-of-the-art production methods while building local technical capabilities through training and knowledge transfer programs.

International aviation industry partnerships are essential for creating market demand for African-produced SAF, particularly given the global nature of aviation fuel markets and airline operations. Research and development cooperation between African institutions and international partners can accelerate technology adaptation and innovation in SAF production methods suited to African conditions and resources. International financial institution cooperation provides crucial support for scaling SAF development across Africa, with institutions like the World Bank, European Investment Bank, and African Development Bank working together to provide complementary financing and technical assistance.

Future Outlook and Industry Transformation Potential

The partnership between the African Development Bank and JGC Corporation has the potential to catalyze transformative changes in Africa’s aviation sector and contribute significantly to the continent’s broader sustainable development objectives. The projected growth of Africa’s aviation market to 345 million passengers annually by 2043 creates substantial demand for sustainable fuel solutions that can support this growth while meeting international decarbonization commitments. The successful development of SAF production capabilities across Africa could position the continent as a significant player in the global sustainable aviation fuel market, contributing to both local economic development and global climate objectives.

The integration of SAF production with existing agricultural and waste management systems across Africa presents opportunities for circular economy development that can create multiple economic and environmental benefits. Regional integration of SAF production and distribution systems could emerge as Africa develops coordinated approaches to sustainable aviation fuel development. The development of SAF production capabilities could also support broader energy transition objectives across Africa, as many of the technologies and infrastructure required for SAF production can be adapted for other renewable fuel applications. The success of African SAF development could also influence global aviation industry approaches to sustainable fuel procurement and supply chain development.

Conclusion

The strategic partnership between the African Development Bank and JGC Corporation represents a pivotal development in Africa’s journey toward sustainable aviation and broader decarbonization objectives. This collaboration addresses critical challenges facing the continent’s rapidly growing aviation sector while positioning Africa as an active participant in the global transition toward sustainable aviation fuels. The partnership’s comprehensive approach, encompassing technology transfer, market development, financing solutions, and capacity building, provides a robust framework for addressing the complex challenges associated with SAF development in African markets.

The long-term implications of successful SAF development in Africa extend beyond the aviation sector to encompass broader energy transition objectives, regional integration initiatives, and sustainable industrialization strategies. The establishment of SAF production capabilities could support the development of broader renewable fuel industries that serve multiple transportation sectors while creating high-value employment opportunities and contributing to economic diversification objectives across African countries. As this partnership progresses from initial agreements to concrete project implementation, its success will depend on sustained political commitment, continued international cooperation, and effective coordination between multiple stakeholders across the continent.

FAQ

What is the main goal of the AfDB and JGC Corporation partnership?
The primary objective is to advance the use of sustainable aviation fuel (SAF) across Africa, supporting the continent’s green aviation agenda and aligning with global decarbonization targets.

Why is sustainable aviation fuel important for Africa?
SAF is crucial for reducing carbon emissions in Africa’s rapidly growing aviation sector, supporting environmental sustainability while enabling continued economic development and connectivity.

What are the main challenges to SAF development in Africa?
Key challenges include limited infrastructure, feedstock supply chain complexities, technical capacity gaps, regulatory uncertainty, and market demand fragmentation.

How does the partnership address technology transfer?
JGC Corporation will facilitate the transfer of Japanese clean-energy technologies and expertise to Africa, adapting proven SAF production methods to local conditions and resources.

What is the projected size of Africa’s aviation market by 2043?
Africa’s aviation market is projected to reach 345 million passengers annually by 2043.

Sources: African Development Bank