Nigeria’s Dangote Petroleum Refinery has secured $2.5 billion from private investors to finance a major expansion of its operations, marking one of the biggest private investments ever disclosed in Africa.
The investment gives private investors a stake in the 650,000-barrels-per-day Dangote Refinery, which began operations two years ago and is currently the largest oil refinery in Africa. Before the deal, the Nigerian National Petroleum Company Limited (NNPCL) was the only outside shareholder, with a 7.2% stake.
In a statement on Thursday, Dangote Petroleum Refinery said the transaction is believed to be Africa’s largest publicly disclosed private investment. The company said the fundraising also paves the way for an initial public offering (IPO) later this year, which will allow members of the public to invest in the refinery.
Founder and Africa’s richest man, Aliko Dangote, said the new funding will support the company’s long-term growth plans by strengthening its financial position alongside existing cash flow and external financing.
Dangote plans to build the world’s largest refinery
Dangote plans to more than double the capacity of its Nigerian refinery from 650,000 barrels per day to 1.4 million barrels per day. If completed, it would become the world’s largest oil refinery, overtaking India’s Jamnagar Refinery.
The company is also expanding beyond Nigeria with plans to build a 700,000-barrels-per-day refinery in Lamu, Kenya, as it grows its presence in East Africa.
Why the investment matters for Africa
Africa continues to depend heavily on imported fuel despite being one of the world’s major oil-producing regions. According to the Africa Finance Corporation, the continent imports more than 70% of its refined petroleum products, along with about $230 billion worth of essential goods each year, including food, plastics, steel and fertiliser.
Dangote says the fresh investment will help increase refining capacity, reduce Africa’s dependence on imported fuel and improve the continent’s long-term energy security.