Dangote looks for financing for USD9 billion refinery

Dangote Group said it will borrow USD3.3 billion to build a USD9 billion oil refinery and petrochemical complex in Nigeria.
The Nigerian group, with interests ranging from cement to oil and gas, also said it was seeking a further USD2.25 billion from development funds for the project, into which it would put USD3.5 billion of its own equity.
The loan was signed on September 4, after Aliko Dangote, owner of the group, divulged plans for the refinery in April.
The Dangote Group makes up 30% of Nigeria’s stock exchange.
Dangote expects the refinery will have a capacity of around 400,000 barrels a day by late 2016, almost doubling Nigeria’s current refining capacity. Industry experts, however, say the refinery will only be profitable if the government allows below market rate crude supplies, or provides subsidies.
“We are not resting on our oars,” group spokesman Anthony Chiejina said, adding that the complex, including petrochemical and fertilizer plants, “[c]ould be the single largest contribution to this government’s economic transformation agenda.”
Nigeria currently has the capacity to produce 445,000 barrels per day between four refineries, but they operate below that, owing to decades of mismanagement.
Nigeria relies on subsidized imports for 80% of its fuel needs.
(August 28, 2013)