Thursday, 5 September 2013

GTBank and SCB coordinate $6.75bn debt financing for Dangote’s refinery, fertilizer projects

Dangote-Signs-Deal




Dangote Industries Limited, 4th September 2013 signed a loan agreement with a consortium of both local and international banks to the tune of $3.3billion for the purpose of constructing the biggest Petroleum Oil Refinery & Petrochemical/ Fertilizer Plants in Nigeria.

The plants, which will cost a total of $9 billion will generate up to 9,500 direct and 25,000 indirect jobs, in addition to reducing current volumes of refined fuel imports by around 50 per cent and effectively stopping the importation of fertilizer.

The USD9billion project will be financed by USD3billion equity and USD6billiion loan capital.

The signing ceremony commits the first tranche of loans secured by Dangote, comprising a USD3.3billion term loan facility supported by a consortium of 12 local and international banks.

This first facility was jointly co-ordinated by Standard Chartered Bank as the Global Coordinator, and Nigeria’s Guaranty Trust Bank plc as the Local Coordinator.

With the refining capacity expected to reach 400,000 barrels of crude oil per day and producing a variety of refined fuel products from local crude resources, Nigeria will cut its current volumes of imported fuel products by a massive 50 per cent.

The 2.8 million tonnes of urea will be channelled into growing the local agriculture sector which is essential in producing healthy crops and promoting Nigeria and West Africa’s agricultural development.

The Petrochemical plant will produce Polypropylene which is a common component of most plastic and fabric products, for example it is used in various forms of packaging, ropes and agro-sacks.

According to Segun Agbaje, Managing Director/CEO of Guaranty Trust Bank plc, this is the largest syndication by Banks in Nigeria and it is being undertaken with the knowledge that the successful implementation of Dangote Refinery and Fertilizer project will have far reaching implications for Nigeria’s economic growth.

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