Dangote Group to build $2.5bn fertiliser plant in Ethiopia

Ethiopian Investment Holdings (EIH), the strategic investment arm of the Ethiopian government, and Dangote Group have signed a comprehensive shareholders’ agreement on the construction of a world-class urea fertiliser production complex in the Horn of Africa nation.

Under the partnership structure, EIH will hold a 40% equity stake while Dangote Group will maintain 60% ownership of the transformative project that represents one of the largest industrial investments in Ethiopian history.

The ambitious project will establish one of the world’s largest single-site urea fertiliser production complexes, with production facilities boasting a combined three million metric tons per annum.

The facility will rank among the top five largest urea production complexes globally.

The two companies will jointly develop, own, construct, operate, maintain, insure, and finance the state-of-the-art urea fertilizer plants and associated infrastructure.

The comprehensive development includes advanced gas transport pipelines to evacuate natural gas from Ethiopia’s Hilal and Calub reserves, storage facilities, logistics infrastructure, and export capabilities designed to serve both domestic and regional markets.

The agreement also provides for potential expansions, upgrades, and similar fertiliser production initiatives in ammonia-based fertilisers, including ammonium nitrate, ammonium sulfate, and calcium ammonium nitrate, further cementing Ethiopia’s position as a regional fertilizer production hub.

The Project Development Costs are estimated at $2.5 billion, with completion targeted within 40 months from commencement.

A significant component of this investment includes the construction of a dedicated pipeline infrastructure to transport natural gas from Ethiopia’s proven Hilal and Calub gas reserves to the Gode production facility, ensuring a reliable and cost-effective feedstock supply for the fertilizer complex.

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This substantial investment underscores both companies’ commitment to transforming Ethiopia’s agricultural sector and enhancing food security across the region. The project is expected to significantly reduce Ethiopia’s dependence on fertiliser imports while creating thousands of direct and indirect employment opportunities in the Somali Regional State and beyond.

In his remark, the President/Chief Executive of Dangote Group,  Alhaji Aliko Dangote, said: This partnership with Ethiopian Investment Holdings represents a pivotal moment in our shared vision to industrialise Africa and achieve food security across the continent.

“The strategic location of Gode, combined with Ethiopia’s abundant natural gas resources from the Hilal and Calub reserves, makes this an ideal location for what will become one of the world’s largest fertiliser complexes.

“We are committed to bringing our decades of experience in large-scale industrial projects to ensure this venture becomes a cornerstone of Ethiopia’s industrial transformation and a catalyst for agricultural productivity throughout the region. The 60-40 partnership structure reflects our commitment to this transformative project while ensuring strong Ethiopian participation.”

Dr. Brook Taye, Chief Executive Officer of Ethiopian Investment Holdings, added: “This landmark agreement with Dangote Group marks a significant milestone in Ethiopia’s journey toward industrial self-sufficiency and agricultural modernisation. As the strategic investment arm of the Government of Ethiopia, EIH is proud to secure a 40% stake in what will be one of the world’s largest urea production facilities. The project aligns perfectly with our national development priorities and will substantially enhance our agricultural productivity while positioning Ethiopia as a regional hub for fertilizer production.

Babajide Okeowo

Source: RipplesNigeria | Read Full Story…