Dangote Signs U.S.$9 Billion Deal to Build Oil Refinery, Petrochemical Complex

The Dangote Group Wednesday made history by signing of a combined $ 9.05 billion facility agreement with a consortium of local banks and international investors for the establishment of a refinery, and petrochemicals cum fertilizer complex in Nigeria.

Agreement

Under the agreement signed at a crowded ceremony in Abuja, a $ 3.3 billion medium term loan will come from local banks and international finance organizations; $2. 25 billion from the Economic Commission for Africa, ECA, and Dangote's equity contribution of $3.50 billion.

The Central Bank of Nigeria, CBN, also made a contribution of N50 billion with interest rate of 7 per cent to be repaid in 15 years.

Chairman of the group, Alhaji Aliko Dangote, described the complex to be located at the OK-LNG Free Trade Zone, between Ogun and Ondo states, as the largest industrial complex in Nigeria's history and that he embarked on the project as a demonstration of his confidence in the Nigerian economy.

His words: "As an investor who believes in Nigeria, knows Nigeria well and whose prosperity was made in Nigeria, we have responded to the challenge with our decision to invest $9 billion in a refinery/petrochemical and fertilizer complex to be located at the OK-LNG Free Trade Zone. This complex will be the largest industrial complex project ever in the history of our great nation."


He commended President Goodluck Jonathan's administration for creating the enabling environment for businesses to thrive in the country, saying "We are happy to inform your excellences that because of the improvement in the enabling environment for investment created during this present government's tenure we have had excellent response from the international finance organizations and today we are here to sign the agreement for the medium term loan of $ 3.3 billion."

Dangote said the project had effectively taken off, with the award of the Engineering, Procurement and Construction, EPC, contract to Saipem of Italy for the fertilizer plant, noting that the Basic Engineering Design and optimization for the refinery had also been awarded.

When completed, the chairman said, the fertilizer plant would produce 2.75 metric tons per annum of Urea and Ammonia; while the refinery would process 400,000 barrels of crude oil per day.