Africa’s richest man, Aliko Dangote, disclosed that his company secured approximately $5.5 billion in bank loans to construct the Dangote refinery. Dangote made this announcement on Wednesday during the ‘AfriCaribbean Trade and Investment Forum’ held in The Bahamas.
Dangote explained that the loan was obtained from domestic banks across Africa based on the company’s balance sheet, rather than through project financing from international lenders.
This strategic move was crucial to advancing the refinery project despite potential obstacles from international financial institutions.
“When we were building the refinery, we knew that if we had gone with the idea of project financing, the international banks would have shut it down,” Dangote remarked.
“They might have asked me for my great-grandmother’s birth certificate, which I don’t think I would have been able to find anyway.”
The business mogul highlighted that the loan accrued interest due to construction delays, but it has been gradually repaid. “We borrowed about $5.5 billion. We paid a lot of interest as we went along because the project was delayed for almost five years. We started in 2018 eventually,” Dangote said.
Dangote further mentioned that approximately $2.4 billion of the loan has been repaid, emphasizing the company’s impressive performance given the project’s scale.
“We’ve actually paid back interest and some principal about $2.4 billion. We now have only about $2.7 billion left to be paid. We’ve done very well for a project of that magnitude,” he added.
Located in Lagos, Nigeria, the Dangote refinery is the largest petroleum refinery in Africa and Europe, with a refining capacity of 650,000 barrels per day.
The refinery is expected to supply petroleum products not only to Nigeria but also to other African countries that rely on Europe for their energy needs.
According to recent reports, the $20 billion refinery has begun exporting jet fuel to Europe. The first shipment, containing 45,000 metric tons of jet fuel allocated to BP, departed from the Lekki Free Zone in Lagos on May 27th, heading to Rotterdam, Netherlands, as per data from S&P Global Commodities at Sea.
While the refinery has started supplying diesel to the local market, Dangote noted that a slight delay has postponed the supply date to mid-July.
