Nigerian Billionaire Aliko Dangote To Borrow $3.3 Billion For Refinery Project
Dangote Group, the West African conglomerate founded by Africa’s richest man, Aliko Dangote, has announced plans to borrow an additional $3.3 billion to invest in a $9 billion oil refinery and petrochemical complex in Nigeria, Nigeria’s BusinessDay has reported.
According to a company official who spoke to BusinessDay, a consortium of local and foreign banks will finance the project. The Dangote Group and the consortium of financial institutions will officially sign the term loan agreements on Wednesday, September 4.
The refinery, which will be located at the Olokola Liquefied Natural Gas (OKLNG) Free Trade Zone in Nigeria’s southwest region, will be Nigeria’s first private and Africa’s largest petroleum refinery, with a projected daily production output of 400,000 barrels a day. The refinery is expected to decrease Nigeria’s dependence on oil imports and boost Aliko Dangote’s fortune significantly in the medium to long term.
While the Nigerian government-owned refineries in Port Harcourt, Warri and Kaduna have a installed refining capacity of 415,000 barrels per day, they operate at less than 30% of their capacity. This means that Nigeria, one of Africa’s top oil producers, relies heavily on foreign refineries.
In May this year, Dangote raised $4.5 billion from a consortium of Nigerian banks for this same project. The Dangote Group is committing $3.5 billion of its own equity to the project and is seeking an additional $2.25 billion from development funds. The total cost of the project is pegged at between $9 and $10 billion, a figure that easily ranks among the largest contributions by a private sector group to Nigeria’s economy.
“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,” said a Dangote Group official who spoke to Business Daily.
Dangote was ranked 43rd on Forbes 2013 World’s Billionaires list with a fortune of $16.1 billion in March. His fortune, most of which lies in shares of publicly traded Dangote Cement , has since climbed to $19.9 billion.
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