Dangote Refinery Raises $2.5 Billion to Expand Africa’s Fuel Output

Nigeria’s Dangote Petroleum Refinery has secured US$2.5 billion in private equity investment to fund expansion plans, including a new refinery in Kenya, the company announced Thursday.

The private placement gives outside investors a stake in the 650,000-barrel-per-day refinery for the first time. Previously, only Nigeria’s state oil company, NNPCL, held equity, with a 7.2 percent share. Dangote called the deal the largest publicly disclosed private investment in Africa’s history.

Analysts said the placement is expected to precede an initial public offering later this year.

Founder Aliko Dangote, said the funding would complement internal cash flow and support the company’s expansion. Dangote plans to more than double the refinery’s capacity to 1.4 million barrels per day, which would make it the world’s largest, surpassing India’s Jamnagar refinery. The company also intends to build a 700,000-bpd refinery in Lamu, Kenya, extending its reach into East Africa.

Africa imports more than 70 percent of its refined fuel and roughly US$230 billion in essential goods annually, including food, plastics, steel, and fertilizer, according to an April report by the Africa Finance Corporation. Dangote said the new investment would help reduce the continent’s reliance on imported fuel and strengthen its energy security.