Aliko Dangote wants to set up the biggest oil refinery – not just in Africa, but around the world – in Nigeria. The billionaire and business mogul is said to have successfully mobilized $4.5 billion in debt financing and is now set to start productions in early 2020.
Dangote’s oil refinery will be the largest single oil refinery in the world with a capacity of producing 650,000 barrels per day (bpd). This facility will go a long way in reducing Nigeria’s chronic dependence on imported petroleum.
Nigeria is perhaps the poster child of irony when it comes to oil and petroleum products. It is one of the biggest miners and exporters of the crude oil, yet ironically it is also a bulk importer of processed petroleum products. That is because the West African nation domestic oil refining capacity is way below the demand within the country.
Dangote’s Business Partners
Known to have topped the charts several times (and probably topping this year) as Africa’s richest man. Dangote lobbied from international lenders who committed about $3.5 billion. For instance, the World Bank’s private sector arm committed $150 million. Last week, Dangote signed a $650 million loan with the African Export-Import Bank (Afreximbank).
Dangote says he is investing more than 60% of what is needed from his own pocket. The Dangote Group further added that Standard Chartered Bank is also arranging for funds for the project.
“We will end up spending between $12 billion to $14 billion. The funding is going to come through equity, commercial bank loans, export credit agencies, and development banks,” said Dangote will addressing members of the press in Lagos on Tuesday.
“Hopefully, we will finish mechanical (construction) by next year and products will start coming out in the first quarter of 2020.”
Dangote’s project will also get a 575 billion naira guarantees from the Central Bank of Nigeria for 10 years. The African Development Bank will also provide a $300 million loan. Other big-time lenders roped into the project includes trade banks from European countries, China, and India.
When finished, the refinery and petrochemical complex will account for half of Dangote’s sprawling assets.
Dangote further adds that he is also looking to acquire more oilfields as he expands his focus from just the cement business to include the oil sector. Much of his wealth was obtained from the cement industry.