The Africa Finance Corporation (AFC) has led a group of key investors in the recent $2.5 billion fundraising by Dangote Petroleum Refinery and Petrochemicals FZE (DPRP).
In a statement released on Thursday, AFC mentioned that this new investment shows its approach of providing early-stage funding and reinvesting in new projects once they start making money.
DPRP owns a huge $20 billion refining and petrochemical complex on a 2,500-hectare site in Lagos.
The refinery can handle 650,000 barrels of crude oil each day and turns crude oil into petrol, diesel, aviation fuel, liquefied petroleum gas, naphtha, and other products for Nigeria, Africa, and global markets.
The nearby petrochemical plant changes propylene from the refinery into polypropylene. This is a key material for packaging, textiles, household goods, car parts, medical products, and other manufactured goods.
As part of the Dangote Group’s Vision 2030, the company plans to double the refinery’s capacity to 1.4 million barrels per day by 2028.
Last month, the refinery management shared that it raised around $2.5 billion in new equity after a private placement that was 3.7 times oversubscribed.
The company described the placement as Africa’s largest public primary equity private placement by value. They confirmed that the transaction resulted in about $2.5 billion in new equity and is the refinery’s first capital raise with outside investors beyond its current shareholders.
According to AFC, this private placement is DPRP’s first equity capital raise to include new investors apart from its original owners.
The transaction was 3.7 times oversubscribed, with strong interest from international and African institutional investors, sovereign-related investment bodies, development finance institutions, and long-time partners.
AFC stated that its involvement strengthens its long-term partnership with the Dangote Group in some of Africa’s biggest industrial projects.
The corporation was previously the Co-Coordinating Bank for a $3 billion syndicated loan for DPRP.
It also recently received full repayment of its initial $300 million senior loan to Dangote Industries Limited, which helped develop the refinery from the planning stage.
Long-term Partnership
Speaking about the deal, Samaila Zubairu, president and CEO of AFC, said their participation shows their ongoing belief in DPRP as a key industrial asset in Africa.
“AFC’s participation in this transaction reflects our continued conviction in DPRP as one of the most consequential industrial assets on the continent,” Mr Zubairu said.
He added that AFC has provided support to the project from the beginning, including through joint financing and working capital during the setup phase.
“This is what a long-term partnership looks like: capital that stays involved as a project grows, becomes operational, and matures into a steady income-generating industrial platform,” he said.
Mr Zubairu described the refinery’s development as a sign of the big industrial goals, execution, and value creation possible in Africa.
Aliko Dangote, president and CEO of Dangote Industries Limited and Chairman of DPRP, called the transaction a strategic move to strengthen the company’s shareholder base.
He noted that the new capital would support DPRP’s cash flow and debt as the company pushes forward its expansion plans.
“This further shows our strong commitment to building local refining and petrochemical capacity, cutting down Africa’s dependence on imported products and boosting the continent’s energy security,” Mr Dangote said.
David Bird, managing director and CEO of DPRP, said the high demand for the private placement shows investor trust in the company.
“The strong demand we saw is proof of our operational excellence, execution ability, and investor confidence in DPRP’s leadership,” Mr Bird said.
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