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The Nigerian oil refining and petrochemical company, Dangote, obtained an investment worth $2.5 billion through a private offering of shares, with the aim of financing the expansion of its giant refinery near the city of Lagos and strengthening its financial structure before an expected initial public offering on the Nigerian Stock Exchange.
A Financial Times report described the operation as the largest announced private investment in the initial capital of an African company, while the company said that demand for shares reached 3.7 times the initial size of the offering.
The financing is the first process to raise capital from external investors outside the refinery’s traditional shareholder base. Investors, funds linked to sovereign entities, development finance institutions, and strategic partners from Africa and abroad participated, including the African Finance Corporation and India Infra Bildco, in addition to other institutions and individuals whose names were not revealed.
The Dangote Group intends to use the financing to support its plan to raise the refinery’s capacity from about 650,000 barrels per day to 1.4 million barrels per day by 2028, which could make it one of the largest oil refineries in the world. The expansion plan includes adding a new refining unit and increasing the production of petroleum derivatives and petrochemicals, including raising the annual capacity for polypropylene production from about 900 thousand tons to 2.4 million tons.
The group’s president, Aliko Dangote, said that the offering represents a step to expand the company’s ownership base and give it a greater institutional character, in addition to complementing the financing generated from the refinery operations and external loans, in a way that supports expansion plans and enhances refining capabilities within Africa.
The deal comes ahead of an initial public offering that the company is planning during 2026 on the Nigerian Stock Exchange, amid estimates that the value of the refinery in the listing process will reach about $40 billion, which may make the offering one of the largest in the history of African financial markets.
During the private offering, the refinery had offered three billion ordinary shares, at a price of 35 cents per share, with the investor being required to purchase no less than one million shares worth $350,000, and subjecting the shares to a one-year sale ban period, according to informed sources. The company confirmed that the proceeds from the offering will be used to expand the refining and petrochemical complex, enhance capital and provide additional financial flexibility for future growth projects.
The refinery expansion comes as part of a broader plan by the Dangote Group to increase its investments in energy and heavy industries on the continent, which includes a project to establish a refinery with a capacity of 700,000 barrels per day on the Kenyan island of Lamu, funded by cash flows, bonds, and proceeds from the upcoming public offering.
