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Despite NNPC bailout, Dangote seeks more loans to salvage refinery project

Aliko Dangote is seeking out more loans to facilitate the completion of his refinery in Lagos.

• September 16, 2021

Aliko Dangote is seeking out more loans to facilitate the completion of his refinery in Lagos.

Reuters said it was informed by sources familiar with the negotiations that the Dangote Group founder has held talks with global oil traders to secure another round of loans for the facility, which has been dubbed the largest on the continent when completed.

“The billionaire has held talks as recently as a month ago with executives from the world’s top two oil traders – Trafigura and Vitol, three sources with direct knowledge of the matter said,” the report said, adding that Dangote’s management denied the talks.

The report said information from sources familiar with the matter said the options available for Mr Dangote include “raising another $500 million from a trade house or consortium.”

Dangote Oil Refinery, a 650,000 barrels per day (BPD) integrated refinery project under construction in the Lekki Free Zone, Lagos, Nigeria, was initially expected to commence production in 2016, the refinery is now slated to begin operations in 2025 as its completion date has been moved eight times. 

Though the Buhari-led administration stepped in to invest via the NNPC, buying a 20 per cent stake for about $2.8 billion in August, A report noted the debt profile for the refinery cost up to $7 billion with debt servicing of almost 700million dollars annually.

The refinery facility is set to carry about 10.4 million tonnes in petrol refining capacity per year. Mr Dangote argues that it would encourage foreign investments in Nigeria’s oil and gas industry, despite continuing to position himself as the sole beneficiary. 

In February, the Dangote Group proposed a provision in the now-passed Petroleum Industry Bill (PIB) seeking to ban oil imports by oil companies without refining licenses.

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