The Central Bank of Nigeria(CBN) Governor, Godwin Emefiele has announced that Aliko Dangote, the President of Dangote Group, has started repaying some of the loans used to finance the Dangote Refinery and Petrochemicals.
During the commissioning of the project in Lagos on Monday, Emefiele stated that the refinery was initially estimated to cost around nine billion dollars in 2013, but was completed with a total of over eighteen billion dollars ($18.5b) with funding distributed into 50 per cent equity investment and 50 percent debt finance.
He added that the commercial loan component of the project was financed mainly by domestic banks, with the balance sourced from foreign banks, and the CBN provided about one hundred and twenty-five billion naira to cover domestic currency requirements for the venture.
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Emefiele further explained that the Dangote Refinery and Petrochemicals project is expected to reduce Nigeria’s reliance on imported petroleum products and boost the economy by creating jobs and increasing foreign exchange earnings.
He said:
“What you may not be fully aware of, Your Excellencies, is that the Dangote Group has started repaying some of the commercial loans even before the commissioning of this facility. This reflects the commercial capability of the Group and its Chairman. I am pleased to inform everyone today that, following extensive repayments, outstanding debt has dropped appreciably from over US$9 billion to US$3 billion.
“I must at this juncture appreciate all the participating local Nigerian banks, who did not only partner with the project through effective financing but were keenly aware of the importance of the project for our nation. They provided immense support and exceptional understanding, even when interest payments and principal repayment had fallen due.”
The Dangote refinery which can process six hundred and fifty thousand barrels of crude oil per day, was the largest single-train refinery in the world.
Going by the processing capacity, the refinery was more than able to meet all of Nigeria’s domestic fuel consumption, which was about four hundred and fifty thousand barrels per day; whilst the excess production would be available for export.
