Dangote signs $650m refinery loan deal with Afreximbank
President of Dangote Group, Aliko Dangote, weekend in Abuja signed a seven-year $650 million loan facility with the African Export-Import Bank (Afreximbank) for his oil refinery project in Lekki, Lagos, Nigeria.
According to facility terms read out during the signing, the loan was signed after a $750 million facility was signed with Nigeria’s Bank of Industry (BoI), and will attract a moratorium of five years.
Devakumar Edwin, executive director, Dangote Group, had told Reuters last week that the oil refinery would cost around $10 billion and should be completed by December 2019.
To finance the project, he said the company would borrow $3.3 billion, arranged by Standard Chartered Bank, while the remainder would be in the form of equity and export agencies.
Dangote had on June 30, last year during Afreximbank’s 24th annual general meeting in Kigali, Rwanda, signed an agreement to provide financing of up to $1 billion to the African conglomerate.
The MoU provides for collaboration between Afreximbank and Dangote Industries Limited in respect of proposed funding of transactions, which could involve the provision of short and long-term liabilities for trade-related projects in Africa.
A brief on the MoU said utilisation of the facility would boost intra-African trade volumes, enhance continental value chains and increase production and export of goods and services across Africa.
The refinery and petrochemical complex is located on 25,000 hectares of swampy land with a jetty to ferry products by sea within Nigeria and abroad, including an undersea pipeline to transport gas. It would account for half of Dangote’s sprawling assets when it is finished next year.
Dangote intends to process different grades of crude to meet local demand for refined petroleum products and also target export markets abroad.