Africa’s richest individual, Aliko Dangote, has revealed that his company secured in bank loans a swooping sum of about $5.5 billion to build the Dangote refinery.
Dangote made this disclosure on Wednesday during the ‘AfriCaribbean Trade and Investment Forum’ in The Bahamas.
The business mogul stated that the loan was secured from domestic banks across the continent based on the company’s balance sheet, not through project financing from international lenders.
Dangote explained that the loan, which accumulated interest because of delays in constructing the refinery, has been gradually repaid.
“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. They might have asked me for my great-grandmother’s certificate of birth which I don’t think I will be able to find it anyway.
“What we did was to borrow the money based on our own balanced sheet. At that time, Naira was very strong. We borrowed the money based on our own balanced sheet.
“We borrowed about $5.5 billion. We paid also a lot of interest as we went along because the project was delayed for almost five years. We started in 2018 eventually,” Dangote said.
$2.4 billion loan paid back
Speaking further, Dangote mentioned that about $2.4 billion of the loan taken to build the refinery has been repaid.
Accordingly, he noted that the company still owes approximately $2.7 billion and emphasized their impressive performance given the project’s scale.
“We’ve actually paid back interest and some principal about $2.4 billion. We’ve done very well. We now have only about $2.7 billion left to be paid. We’ve done very well for a project of that magnitude,” Dangote added.
What you should know
The Dangote refinery, which is based in Lagos, Nigeria, is the biggest petroleum refinery in all of Africa and Europe.
- With a refining capacity of 650,000 barrels, the refinery is expected not only to supply petroleum products to Nigeria, but also other African countries which depend solely on Europe for its energy consumption.
- According to the latest report, the $20 billion refinery has started exporting jet fuel to Europe
- The first shipment, loaded onto the vessel “Doric Breeze,” left the Lekki Free Zone in Lagos on May 27th heading to Rotterdam, Netherlands, as per data from S&P Global Commodities at Sea.
- The shipment included 45,000 metric tons of jet fuel, which was allocated to BP as part of a tender for 120,000 metric tons issued by the refinery.
- While the refinery has begun the supply of diesel to the local market, Dangote said a slight delay has led to the postponement of the supply date to the middle of next month.
“We had a bit of delay, but PMS will start coming out by 10 to 15 of July. But then we want to keep it in the tank to make sure that it settles. So, by the third week of July, we’ll be able to come out to take it into the market,” Dangote said.
