NNPC solicits for $2.5bn to finance stake in Dangote refinery

The National Petroleum Corporation (NNPC) has reportedly approached the African Export-Import Bank (Afreximbank) for financial support to acquire a stake in Dangote Refinery.

NNPC is soliciting for $2.5 billion to finance its stake acquisition in Africa’s largest refinery and the world’s largest single-track refinery which is scheduled to commence operation next year.

The corporation had revealed that it was interested in acquiring a 20 percent minority stake in the Dangote Refinery, a decision that is part of a larger move to become stakeholder in six other privately-owned refineries.

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Negotiation talks with Dangote refinery reportedly compelled the NNPC to enter into a loan discussion with Afreximbank, according to Daily Independent, but it is not clear if NNPC will take the same route for another stake acquisition.

Dangote refinery is not the only refiner the Nigerian National Petroleum Corporation (NNPC) plans to acquire a minority stake in, as its incoming rival, BUA will also be expected to part with some shares.

The government-owned oil company will acquire a stake in BUA refinery in line with a new policy issued by President Muhammadu Buhari-led administration.

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The government policy directs NNPC to acquire a stake in any privately-owned refinery that has an output capacity above 50,000 barrels per day (bpd) – Ripples Nigeria gathered that both Dangote and BUA refinery have a capacity that exceeds the bpd range.

Dangote refinery has 650,000 barrels-per-day and BUA Group announced that its refiner, which is still in development phase will have 200,000 barrels per day capacity. Aside from these companies, there are still four refineries, also still in the development phase, being eyed by NNPC.