Dangote Group, controlled by Africa’s richest man, agreed on a $3.3 billion loan with 12 Nigerian and foreign lenders to build the country’s biggest oil refinery and petrochemical and fertilizer complex.
The $9 billion cost of the facilities, scheduled to be completed in 2016, will be met with $6 billion loan capital from banks and $3 billion in equity, the Lagos-based company said.
“This plant will further entrench Africa’s role on the global map as not only a valued contributor for natural resources, but also a competent manufacturer of refined products and fertilizer,” billionaire Aliko Dangote, president of the company, said today in Abuja.
While Nigeria is Africa’s top producer of crude oil, it relies on fuel imports to meet more than 70 percent of its needs. Four state refineries with a combined capacity of 445,000 barrels a day are operating at a fraction of that because of poor maintenance and aging equipment.
Dangote’s complex, in Nigeria’s southwest, will comprise a 400,000-barrel-a-day refinery, a 2.8 million-ton urea plant and a petrochemical factory to produce polypropylene, used to make plastics. Once operational, the refinery will cut fuel imports by 50 percent, while fertilizer imports will be “effectively” halted once the urea plant opens, the company said.
Today’s agreement will provide the first tranche of loans to the project arranged by Standard Chartered Bank Plc, the international coordinator, and Guaranty Trust Bank Plc, the local arranger. Others lenders include Access Bank Plc, Zenith Bank Plc and Fidelity Bank Plc.
The group owns Dangote Cement Plc, the country’s biggest company by market value, Dangote Sugar Refinery Plc, Dangote Industries Ltd. and Dangote Oil Services Ltd.