Dangote Repays $2.4bn of $5.5bn Loan for Lagos Refinery

Loans of $5.5 billion were secured for the Dangote Petroleum Refinery in the Lekki area of Lagos State, the owner of the facility, Mr Aliko Dangote, has disclosed.

However, about $2.4 billion has been repaid as interest and some principal, the businessman stated at the ongoing AfriCaribbean Trade and Investment Forum organised by the African Export-Import Bank (Afreximbank) in The Bahamas.

The richest man in Africa told participants of the programme that the credit facility increased to the amount because of the delays encountered while building it.

In May 2023, former President Muhammadu Buhari commissioned the Dangote Refinery, which gulped about $220 billion with the capacity to refine 650,000 barrels of crude oil per day.

The facility has commenced producing jet fuel, diesel and other petroleum derivatives, but it is yet to sell premium motor spirit (PMS), otherwise known as petrol.

Mr Dangote disclosed that his company would begin to sell petrol from next month, a development some analysts have projected to slightly crash pump price in Nigeria from the current N620 per litre.

“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. By the third week of July, we’ll be able to come out to take it into the market,” Mr Dangote said.

As the loans he secured for the project, the business mogul stated that, “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.

“We’ve 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,” he said.

Mr Dangote informed the audience that the loans were taken from local and international lenders based on the company’s balance sheet and not through project financing.

He explained that if the latter was adopted, it would have been difficult to secure the necessary funding to make the project a reality.

“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 balanced sheet. At that time, Naira was very strong. We borrowed the money based on our balanced sheet,” he stated.

By Aduragbemi Omiyale

Leave a Reply

Your email address will not be published.

You may use these <abbr title="HyperText Markup Language">HTML</abbr> tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>