- The Chairman of Dangote Industries, Aliko Dangote, has begun negotiations to secure billions in funding for his refinery
- The billionaire is reportedly in talks with banks and other lenders to secure funds to procure additional crude oil for the facility
- Africa Finance Corporation (AFC) has already invested in the refinery to help it get off the ground
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
Aliko Dangote, Nigeria and Africa’s richest man has begun talks to secure billions of dollars in additional financing to boost production at his $20 billion refinery.
The refinery is designed to change Nigeria’s energy terrain and reduce its reliance on imported petroleum products.
Credit: Bloomberg/Contributor
Source: Getty Images
Dangote seeks to boost production with crude imports
Dangote is negotiating with several commercial and development banks, oil traders, and other critical industry players to raise funds to ensure a stable and continuous refinery supply.
According to a previous Legit.ng report, Dangote Industries has procured crude from the US and Brazil and is exploring deals with African countries such as Libya and Angola to meet surging demands.
The 650,000 bpd-capacity refinery already produces 420,000 barrels daily, but the billionaire has set goals to reach total capacity by mid-2025.
The facility began producing diesel, aviation fuel, and Naphtha in September and followed up with petrol in October. It also agreed with local marketers to sell petrol.
Dangote enters deal with NNPC for crude oil
Efforts to secure continuous supply from the Nigeria National Petroleum Company Limited (NNPC) have been complicated, causing the Nigerian government to begin the naira-for-crude oil sale arrangement.
Financial Times reported that in December last year, Africa Finance Corporation (AFC) invested in the refinery to help it get off the ground.
However, Dangote is now facing the challenge of obtaining additional funds to cover the refinery’s crude procurement and operational costs, projected at $2 billion every 90 days for a minimum daily supply of 300,000 barrels.
Read also
Dangote Refinery, marketers sign deal to lift 240m litres of petrol monthly as NNPC imports
Dangote faces challenges due to naira volatility
According to reports, several lenders have worried about the naira‘s volatility. The Nigerian government has devalued the naira, making financing and importing crude more expensive.
Despite the challenges, the world’s 46th wealthiest man is committed to using the mega refinery to meet Nigeria’s petrol demand, estimated at 30 to 35 million litres daily.
Experts have projected that once operational, the refinery would reduce the need for imported fuel, which costs the federal government billions annually.
Dangote Cement seeks to borrow money from Nigerians
Legit.ng earlier reported that Dangote Cement has received the Board of Directors’ approval to access medium to long-term debt funding from the domestic capital markets.
The bonds’ proceeds will refinance existing debt and working capital.
In the first nine months of 2024, the cement company reported N2.5 trillion in revenue via increased sales in the local markets.
PAY ATTENTION: Сheck out news that is picked exactly for YOU ➡️ find the “Recommended for you” block on the home page and enjoy!
Source: Legit.ng