Africa Finance Corporation (AFC) has put money into Dangote Petroleum Refinery through a $2.5 billion private placement, deepening a financing relationship that started with a $300 million loan.
AFC led a group of strategic investors in the refinery’s first equity raise open to outsiders the first time investors beyond the existing ownership circle got a seat at the table. The institution hasn’t said how much it put in or what stake it walked away with.
Demand for the placement came in at 3.7 times the shares on offer. International and African institutional investors, development finance institutions, sovereign-linked vehicles and strategic partners all joined the round.
Dangote Petroleum Refinery will blend the new equity with internal cash flow and external debt to fund its expansion.Aliko Dangote, chairman of the refinery and president of Dangote Industries, said the deal will widen the company’s shareholder base and give it more firepower for growth.
This latest cheque marks a shift in how AFC backs the project.The infrastructure financier first gave Dangote Industries a $300 million senior term loan that carried the refinery through its development years. Dangote has since paid that loan off in full.
AFC did not disclose how much it invested, how many shares it acquired or the size of its stake. A wider group of investors raised the full $2.5 billion, so the amount does not represent AFC’s investment alone.The deal changes AFC’s relationship with the refinery. It previously supported the project through loans and working-capital financing. AFC has now taken an equity position through the private placement.
They also sat as co-coordinating bank on a $3 billion syndicated loan for the refinery, then stepped in to support working capital during the commissioning phase. AFC President and Chief Executive Samaila Zubairu said the equity investment carries the institution’s involvement forward, from the refinery’s early build to its current expansion push.
Their participation in this transaction reflects our continued conviction in DPRP as one of the most consequential industrial assets on the continent,” Zubairu said.The deal gives AFC a stake in a business that has now moved past construction and into full commercial operations.
It turns crude oil into petrol, diesel, aviation fuel, liquefied petroleum gas, naphtha and other products for both the domestic and export markets. Next door, its petrochemical plant churns out polypropylene for industries ranging from packaging to textiles to car manufacturing.
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Dangote Refinery Lands Another Financing Deal
This equity raise lands just months after Dangote Refinery wrapped up another major financing deal.Back in March, Afreximbank underwrote $2.5 billion of a $4 billion five-year syndicated loan for the refinery, with Afreximbank and Access Bank running the show as co-mandated lead arrangers.
The refinery used that money to consolidate its existing debt and restructure its finances around its operating and expansion plans.
This latest placement does something different, though. Dangote issued fresh shares to bring new equity into the company, giving the refinery another lever to pull for capital as it grows, rather than leaning on borrowed money alone.
The corporation committed $600 million to Greenview Fertiliser Corporation as part of a $7 billion expansion drive. That project aims to lift Dangote’s Nigerian urea capacity from three million tonnes to nine million tonnes a year, plus build a new fertiliser plant in Ethiopia.
