The world’s largest single oil refinery is set for construction in Nigeria by Aliko Dangote who is Africa’s richest man. The refinery will cost a whopping US $5bn and production expected to start in early 2020.
The mega refinery will have a capacity of 650 000 barrels per day (bpd) to help to reduce Nigeria’s dependence on imported petroleum. Despite being a crude oil exporter, Nigeria imports the bulk of its petroleum because of a lack of domestic refining capacity.
Funding of the oil refinery
The project will be financed by lenders who will commit approximately US $3bn, with the World Bank’s private sector arm providing US $150m and Dangote investing more than 60% from his own cash flow.
“We will end up spending between US $12bn to US $14bn. The funding is going to come through equity, commercial bank loans, export credit agencies and developmental banks,” said Dangote.
“We are hoping to finish the mechanical construction by next year and products to start coming out in the first quarter of 2020,” he added.
Once complete, the planned refinery and petrochemical complex is expected to account for half of Dangote’s sprawling assets. He recently signed a loan of US $650m with the African Export-Import Bank (Afreximbank) for the project. Dangote said he was looking to acquire more oilfields as his focus shifts towards the oil sector to feed the refinery.