• Monday, May 27, 2024
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Dangote secures $4.25bn for proposed 400,000bpd refinery

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Aliko Dangote, Africa’s wealthiest man, says he has negotiated loans of $4.25 billion from banks to build an oil refinery with a capacity of around 400,000 barrels per day (bpd) by late 2016 to help the country reduce fuel imports, reports Bloomberg.

Refining “is an excellent business to get into,” Dangote said on Tuesday in an interview with Bloomberg TV’s Ryan Chilcote in Cape Town, where he was attending a business forum.

“We have already secured $4.25 billion — two offshore banks and the rest are Nigerian banks.”

Nigeria imports about 70 percent of the oil products it needs to meet domestic requirements. The nation’s four refineries process less than the 445,000 barrels a day of capacity because of aging infrastructure and poor maintenance. The country exports about four times that volume in crude oil.

“Moving into the oil refinery business is smart as there is a clear need for investments in this sector to help the country achieve its GDP growth potential,” Andy Gboka, an analyst at investment bank Exotix Ltd., said by phone from London on Wednesday. “The country relies on imports for its own oil consumption while the country is an oil producer. This is something which is quite weird if you’re to look on a world-wide basis.”

Dangote is Africa’s richest person, with an estimated wealth of $20 billion, and the 34th wealthiest person globally, on the Bloomberg Billionaires’ Index. Dangote controls Dangote Cement Plc, Africa’s largest producer of the building material, through Dangote Group.