Dangote Industries Limited has signed a $4.2 billion natural gas supply deal with China’s GCL Group to power a major fertilizer plant in Ethiopia.
The agreement was signed by Aliko Dangote, President of the company, in Lagos, according to a report by Business Insider on Monday, March 16.
The deal strengthens an earlier partnership between Dangote Industries Limited and Ethiopian Investment Holdings to develop a large-scale urea fertilizer complex in Gode, Ethiopia.
What they are saying
The $2.5 billion fertilizer project is a joint venture between Dangote Industries Limited (60% ownership) and Ethiopian Investment Holdings (40% ownership), with completion expected by 2029.
The natural gas agreement guarantees a 25-year energy supply, ensuring uninterrupted operations once the plant becomes operational.
- “Africa’s largest industrial conglomerate, Dangote Industries Limited, has secured a $4.2 billion, 25-year natural gas supply deal with China’s GCL Group to power a major fertilizer expansion project in Ethiopia, highlighting one of the most ambitious China–Africa industrial partnerships in recent years,” the report stated.
- Dangote said the project reflects a broader strategy to strengthen Africa’s industrial value chain and reduce reliance on imported finished products.
Zhu Gongshan, Chairman of GCL Group, said the partnership represents a new model of China–Africa industrial cooperation integrating gas supply, pipeline infrastructure, and fertilizer manufacturing.
More insights
The $4.2 billion gas deal comes amid rising global fertilizer demand, driven partly by supply chain disruptions linked to geopolitical tensions in the Middle East. Dangote Fertilizer Ltd. recently reported a surge in orders as buyers seek alternative sources.
- Devakumar Edwin, Vice President of Dangote Industries Ltd., attributed the demand spike to disruptions in global supply chains and rising natural gas prices.
- About one-third of global fertilizer supply passes through the Strait of Hormuz, which is currently constrained by geopolitical tensions.
- Dangote’s Lagos fertilizer facility produces 3 million tons annually, exporting about 37% to the United States.
- The company aims to surpass Qatar as the world’s largest urea exporter within four years.
Beyond demand trends, Dangote is also expanding production capacity through new technology partnerships, which will significantly increase output and improve environmental efficiency.
What you should know
The Gode fertilizer project is a $2.5 billion joint venture signed in August 2025 between Dangote Group (60%) and Ethiopian Investment Holdings (40%), designed to be one of the world’s largest single-site urea fertilizer complexes.
- The plant will have an annual production capacity of 3 million metric tons.
- It will be powered by natural gas from Ethiopia’s Hilal and Calub reserves, delivered via dedicated pipelines by GCL Group.
- The project includes storage, logistics, and export infrastructure, with plans for future expansion into ammonia-based fertilizers.
- Completion is targeted within 40 months, with thousands of direct and indirect jobs expected in Ethiopia’s Somali Region.
Ethiopian Investment Holdings said the project will enhance food security, improve agricultural productivity, and position Ethiopia as a key fertilizer hub in East Africa.
