International law firm Clifford Chance has advised Dangote Industries Limited, as borrower, on a USD 3.30 billion financing. The proceeds of the financing will be used for the planning, development and construction of a greenfield fertilizer manufacturing plant and a greenfield crude oil refinery plant. The plants are to be constructed in the Olokola Free Trade Zone in Nigeria, at a combined development cost of USD 9 billion. It will be the largest industrial complex project in the history of Nigeria.
Both projects are noteworthy for their scale as well as their vast economic potential within Nigeria and regionally. The fertilizer plant project will be undertaken by Dangote Fertilizer Limited and once constructed will have the capacity to produce 2.8 million metric tonnes of urea and ammonia per annum and will be the largest fertilizer plant in Africa. The objective of the project is to harness a portion of Nigeria’s abundant natural gas supplies to meet increasing fertilizer demand for a buoyant domestic agricultural market as well as creating considerable export opportunities.
The crude oil refinery project will be undertaken by Dangote Oil Refining Company Limited and once constructed will have a capacity to process 400,000 barrels of crude oil per day and 600,000 metric tonnes of polypropylene per annum. The refinery plant will play a crucial role in satisfying growing local demand for basic petroleum products and reducing the country’s current dependence on imports. It achieves particular prominence in Nigeria in view of the lack of large scale investment in domestic refineries in recent years and is expected to double Nigeria’s refinery capacity by late 2016.
Banking and finance partner, Edmund Boyo, who led the Clifford Chance team, says: “We are delighted to have advised Dangote on this landmark transaction. This financing illustrates the sophistication of the Nigerian banks and their ability to write big tickets as well as the desire of the international banks to participate in well-structured financings in Nigeria. We are convinced that these projects will be transformative for the Nigerian economy.”
Edmund was assisted by senior associates Michael Gibling, Anabelle Wiedmann and Craig Dale. Partner Dan Neidle and senior associate Allegra Benitah provided tax advice.
