Aliko Dangote, Africa’s wealthiest man, is actively working to secure billions of dollars to fund crude oil supplies for his $20 billion refinery located on the outskirts of Lagos. This move aims to ensure the facility operates at its full capacity of 650,000 barrels per day (bpd).
A report by the Financial Times reveals that Dangote is engaging with commercial banks, development lenders, oil traders, and other stakeholders to raise funds for crude procurement. Industry sources estimate that maintaining a steady supply of 300,000 barrels per day requires approximately $2 billion every 90 days.
Expanding Crude Sources
Dangote Industries sources crude from the US and Brazil and begins discussions with African suppliers, including Libya and Angola. Devakumar Edwin, a senior executive at the company, confirms these efforts to diversify crude supply. Even with 365,000 bpd expected from Nigeria’s state oil company, NNPC, Dangote still needs an additional 185,000 bpd to meet operational targets.
Addressing Challenges and Investor Concerns
The refinery faces several hurdles, including the naira’s sharp devaluation and construction costs that exceed budget estimates. Investors express concerns about the profitability of the project under these conditions. One banker involved in the fundraising comments, “The refinery may never make a profit in real terms.”
In a recent meeting with President Bola Tinubu and NNPC CEO Mele Kyari, Dangote seeks assurances that NNPC can supply crude with payments in naira. However, doubts persist about NNPC’s ability to fulfill this commitment due to its significant forward oil sales.
Support from Africa Finance Corporation
The Africa Finance Corporation (AFC), a major investor in the refinery, is actively involved in fundraising discussions. While AFC previously led a financing round to support the refinery’s launch, it declines to comment on its current role in the process.
Transforming Nigeria’s Energy Sector
The refinery, the largest single-train refinery in the world, is poised to transform Nigeria’s oil industry. It addresses the country’s reliance on imported refined products despite being Africa’s largest crude oil producer.
Currently operating at 420,000 bpd, the refinery produces jet fuel, naphtha, and petrol. Dangote projects it will reach full capacity by the second quarter of next year, meeting Nigeria’s entire petrol demand of 30–35 million liters daily and reducing fuel import dependence.
Dangote describes the project as a transformative initiative that tackles Nigeria’s refining challenges and reshapes the nation’s energy landscape.
