The Dangote Group has said it will sign
$5.55bn loan deals with financiers on
September 4 for the building of a $9bn
refinery and petrochemical complex to be
located at the Olokola Free Trade Zone, Ondo
State.
The group told Reuters on Tuesday it would
borrow $3.3bn for the 400,000 barrels a day
refinery expected to double the country's
refining capacity by late 2016.
The conglomerate, with business interests in
cement, food processing and oil and gas, also
said it was seeking another $2.25bn from
development funds for the refinery.
When put together, about $5.55bn will be
sourced externally from financiers and the
group said the loan deals would be signed
with the financiers on September 4.
The Chairman, Dangote Group, Alhaji Aliko
Dangote, who recently emerged as Africa's
richest man, said he would put $3.5bn down
as his own equity.
Dangote had in April said he would put down
$4bn of his personal fortune to build the
refinery, while international financial
institutions would raise the balance.
The Dangote Group spokesman, Mr. Anthony
Chiejina, who spoke with Reuters, said, "We
are not resting on our oars. The complex,
including petrochemical and fertiliser plants,
could be the single largest contribution to
this government's economic transformation
agenda."
The 400,000-barrel capacity, experts have
said, would almost double Nigeria's current
refining strength.
"This will really help not only Nigeria but
sub-Saharan Africa. There has not been a
new refinery for a long time in sub-Saharan
Africa," Dangote had told Reuters in a
telephone interview.
Nigeria currently has the capacity to produce
some 445,000 barrels per day from four
refineries, which operate well below that
owing to decades of mismanagement and
corruption.
The country relies on subsidised imports for
80 per cent of its fuel needs.
Dangote said the country's ability to import
fuel would soon be challenged.
"In five years, when our population is over
200 million, we won't have the infrastructure
to receive the amount of fuel we use. It has
to be done," he said.
Past efforts to build refineries have often
been delayed or cancelled, but analysts have
said Dangote should be able to build a
profitable Nigerian refinery, owing to his
past successes in industry and his strong
government connections.
Analysts have said previous attempts to get
the refineries going were held back by vested
interests such as fuel importers profiting
from the status quo.
"The people who were supposed to invest in
refineries, who understand the market, are
benefiting from there being no refineries
because of the fuel import business. Some
are going to try to interfere," Dangote said.
He said making a new refinery run at a profit
would work even if the government failed to
scrap the subsidised fuel price that has
deterred others from investing.
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