Local, foreign banks stake $3.3bn in Dangote oil refinery
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| Aliko Dangote |
A major milestone towards the construction of Nigeria’s first private and Africa’s largest petroleum refinery will be reached on September 4, with the signing of a term loan between Dangote Group and a consortium of local and foreign banks for the financing of the project.
Dangote Group is committing an equity of $3.5 billion to the massive project, BusinessDay has learnt. In what could be the single largest contribution to the Nigerian government’s economic transformation agenda, Dangote Group plans to invest $9 billion to build the largest refinery/petrochemical/fertiliser complex in Africa at the Olokola Liquefied Natural Gas (OKLNG) Free Trade Zone.
According to a company official, “we are not resting on our oars as we seek to make possible what could be the single largest contribution to this government’s economic transformation agenda, with our investment of $9 billion in the largest refinery/petrochemical/fertiliser complex in Africa.”
Dangote plans to raise additional $2.25 billion from the DFIs and ECAs to augment its equity contribution of $3.50 billion. The Group reported that due to the vastly improved investor friendly environment in Nigeria, there was a tremendous response by reputable international finance organisations to participate in this syndication.
Dangote Group has in the last five years increased 10-fold to a market capitalisation of $22 billion and today accounts for over 30 percent of the total market capitalisation of the Nigerian Stock Exchange.
The Group said that its massive expansion in the last five years has coincided with the tenure of this administration and have been due mainly to the formulation and implementation of progressive policies of this government, like the cement backward integration policy that has seen Nigeria achieve self-sufficiency in cement production.
A company spokesman said, the “administration has helped create and maintain the enabling environment that has encouraged it to invest over $6 billion in the Nigeria cement manufacturing industry in the last seven years.”
Aliko Dangote, Africa’s richest man, recently unveiled the Group’s plan to invest up to $8 billion to build a Nigerian oil refinery with a capacity of around 400,000 barrels a day and it could come on stream by 2016.
Dangote Group has chosen to walk a path where others have been unable to thread, and analysts said last night they expect the refinery to help cut Nigeria’s oil import volumes significantly while also helping to deal a blow on the opaqueness around the subsidy management system. Nigeria’s installed refined capacity today stands at 415,000 barrels per day, but the government-owned refineries in Port Harcourt, Warri and Kaduna operate at around 30 percent of capacity.
- BusinessDay
