Dangote Unveils 20,000MW Power Project, Plans to List Refinery for African Investors

Dangote moves into power sector

Aliko Dangote is making a serious play for Nigeria’s electricity sector, announcing plans to generate 20,000 megawatts of power — a figure that would more than triple what the country’s entire national grid produces on a good day.

Dangote revealed the plan during a conversation with Makhtar Diop, Managing Director of the International Finance Corporation, which journalists monitored on Wednesday.

“We are now going into power, 20,000 megawatts,” Dangote said. “We are building the biggest deep-sea port, and we are doing LNG. Why? Because we are looking at the needs of Africa and making them a reality.”

He did not say where the plants will be built or when construction starts. But the man has earned some scepticism credit. His $20 billion refinery in Lekki — which critics spent years insisting was a fantasy — is now processing 650,000 barrels of crude per day at near full capacity.

“People always said this refinery will never happen. But today, we have shown that as an African company, we can deliver,” he said. “That gives us a voice to tell others, come and invest in Africa.”

That refinery changed Nigeria’s downstream market. For decades, the country exported crude oil and imported nearly every refined product it used. “At one point, we were exporting 2.4 million barrels per day and not processing even one barrel. Every single product we used — gasoline, jet fuel, everything — was imported. I said no, this cannot continue,” Dangote recalled.

Opening the doors to African investors

The power announcement came alongside another interesting detail: Dangote wants to list parts of his group, including the refinery, on the stock market. Africans would be able to buy shares, and dividends would be paid in dollars — a hedge against the currency swings that have burned local investors before.

“When we list, we are going to ask Africans to invest, and we want to derisk their capital. All our dividends will be in dollars,” he said.

He added: “If I don’t invest my own money, I cannot go anywhere and convince others to invest. But now we have demonstrated that these things are possible.”

The bigger picture

Dangote used the IFC platform to speak plainly about what makes doing business in Africa needlessly hard. He needs 38 visas just to move around the continent. It costs more to ship goods from Lagos to Accra than from Spain to Lagos. A short flight between Lomé and Accra can run $600.

“I need 38 visas to move around Africa. How do I invest if I’m not able to move around? It doesn’t make sense,” he said.

The power push lands days after the Senate confirmed Joseph Tegbe as Nigeria’s new Power Minister, tasking him with ending the country’s cycle of grid collapses. Between a new minister with a mandate and Africa’s richest man with both cash and a track record, Nigeria’s electricity story might actually get interesting.

Sources: The Punch, ThisDay, Pulse Nigeria, Billionaires Africa