By Priye Briggs
Nigeria’s Dangote mega-refinery announced on Thursday that it has raised $2.5 billion from private investors to finance expansion plans, including extending its refining operations into East Africa.
The private equity deal gives new investors a stake in the 650,000 barrels-per-day facility, which was commissioned two years ago and remains Africa’s largest refinery.
Before this funding round, the only government shareholder was the Nigerian National Petroleum Company Limited, NNPCL, which holds roughly a 7.2% stake.
According to Dangote Petroleum Refinery and Petrochemicals, the investment “is believed to be the largest publicly disclosed private investment in Africa.”
Market analysts said the private placement sets the stage for an Initial Public Offer later this year, when shares in the refinery will be opened to public investors.
The company’s founder and Africa’s richest man, Aliko Dangote, said the proceeds from the private placement will help raise “capital to complement internal cash flows and external funding” as the company “advances its expansion agenda”.
Dangote is targeting to more than double output at its Nigerian plant from 650,000 bpd to 1.4 million bpd. That would make it the biggest refinery in the world, overtaking India’s Jamnagar facility.
The group is also working on a new 700,000-bpd refinery in Lamu, on Kenya’s coast, for the East African market.
With the fresh capital, Dangote said the company is aiming to reduce “Africa’s reliance on imported refined products” and strengthen the “continent’s energy security.”