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Aliko Dangote has secured $2.5bn in investment to fund the expansion of his Lagos mega-refinery, in what would be Africa’s largest ever publicly disclosed private equity placement, according to a statement released on Thursday.
The billionaire Nigerian businessman said the investment in Dangote Petroleum Refinery and Petrochemicals, which includes backing from the Africa Finance Corporation and an investment vehicle facilitated by the African Export-Import Bank, would help the business advance its “expansion agenda”.
Dangote has been planning to significantly grow the capacity of the refinery from about 650,000 barrels per day to 1.4mn b/d by 2028. This would make the facility, which is already the largest in Africa, one of the biggest in the world.
The offering, which was 3.7 times oversubscribed, according to the statement, is a vote of confidence ahead of what is widely expected to be a landmark listing for the company, at a predicted valuation of some $40bn, on the Lagos Stock Exchange.
The listing planned for later this year is expected to be Africa’s largest initial public offering on record.
Dangote, Africa’s richest man, said it demonstrated a commitment to “developing domestic refining and petrochemical capacity” and that it would help reduce Africa’s “reliance on imported refined products”.
The facility, which cost $20bn to build and reached full capacity in February, has become increasingly important as efforts to diversify energy supply chains away from the Middle East continue and since the US conflict with Iran has reignited.
It became the largest major exporter of aviation fuel globally in April, according to S&P, and has also become important in ensuring that Nigeria, a major crude producer, no longer needs to import most of its petrol and diesel from abroad.
Alongside efforts to boost the refining capacity of the plant, Dangote is also looking to bolster production of polypropylene, a polymer used in food packaging, textiles and automotive parts.
Africa has been enjoying a windfall in investment in recent years. It secured some $70bn in foreign direct investment last year, according to this month’s Unctad World Investment Report, a third higher than the average for the period between 2010 and 2024 and the third highest level since 1990.
Dangote has ambitious plans to expand his interests across Africa, and told the FT that he was seeking to invest some $45bn across the continent by 2030. He is currently looking to expand his presence in east Africa with plans for a proposed 700,000 b/d refinery in Kenya.
