Africa’s richest billionaire and leading industrialist Aliko Dangote has finalized a new $750-million local bond program to help finance the completion of his $19-billion integrated refinery and petrochemical plant.
The news comes after a flurry of media reports that the Nigerian billionaire has exhausted all the funding options for his 650,000-barrel-per-day integrated refinery project in the Lekki Free Zone near Lagos, Nigeria.
According to Fitch Ratings, a U.S. credit rating agency, the refinery project is still on track to be completed by 2023 and will require an additional $1.1 billion in capital expenditure, which will be partially funded by the new bond.
Given the importance of the refinery’s cash-flow contribution to Dangote Industries Limited’s deleveraging capacity, Fitch Ratings explained that completing the refinery project in a timely manner is key for the company’s financial health, as only limited delays or cost overruns are tolerated in its current financial rating.
Dangote Industries Limited is a Nigerian conglomerate with diverse interests. Led by Dangote, the group is Africa’s most diversified conglomerate, with a controlling stake in the continent’s largest cement company Dangote Cement, as well as a shareholding in future integral players in the petrochemical industry through its fertilizer and oil refinery businesses.
Prior to the recent delay, a report released nearly two months ago revealed that the $19-billion integrated refinery project will begin operating in the third quarter of 2022 as part of the strategy to gradually establish a downstream industry and make the country a net exporter of refined petroleum products and petrochemicals by 2026.
A lack of access to foreign currency, an ailing economy, the COVID-19 pandemic, and, most recently, funding have all hampered the refinery project.
When completed, the refinery’s pipeline infrastructure, which will be the world’s largest vertically integrated facility, will process 540,000 barrels of Nigerian crude per day in the first phase of operation, increasing to 650,000 barrels per day later.
The refinery will also generate 4 million tonnes of jet fuel per day, 65 million liters of premium motor spirits (petrol), 15 million liters of diesel and 3 billion standard cubic feet of gas.
