Aliko Dangote targets Africa's Record-Breaking IPO as Refinery Seeks $5 Billion Expansion Fund

• Dangote Refinery plans to raise $5 billion through an IPO to expand its refining capacity from 650,000 to 1.4 million barrels/day
• The planned IPO could become Africa's biggest-ever stock market listing, pending approval from Nigeria's SEC.
• The refinery also plans to attract investors across Africa and is considering building another refinery on Kenya's coast

Dangote Petroleum Refinery & Petrochemicals FZE is preparing to raise about $5 billion through an Initial Public Offering (IPO) expected to be completed in October, with the funds set aside to expand the refinery's processing capacity from 650,000 barrels per day to 1.4 million barrels per day.

According to a Reuters report, the planned share sale is expected to rank as Africa's largest stock market listing if successfully completed.

Sources familiar with the transaction disclosed that the company has already filed an initial application with the Securities and Exchange Commission (SEC) and is awaiting regulatory clearance.

Once approval is secured, the refinery is expected to release its prospectus in September, paving the way for the public offering in October.

One of the sources explained that while the target remains $5 billion, the final amount to be raised will depend on the approval granted by the Nigerian capital market regulator.

“The IPO’s target was $5bn, but the final figure will depend on what the Nigerian regulator approves, as the primary listing will be on the Nigerian Stock Exchange,” the source said.

Expansion plans drive fundraising

The refinery intends to channel the proceeds into expanding its Lagos facility as part of a broader strategy to reduce Africa's reliance on imported petroleum products while boosting the continent's capacity to export refined fuels.

If the IPO raises the targeted amount, it would represent more than four per cent of the Nigerian Exchange's (NGX) All Share Index, whose market capitalisation stood at approximately $116 billion as of Tuesday.

The proposed listing comes shortly after the refinery completed a $2.5 billion private placement, selling a six per cent equity stake that valued the business at around $40 billion.

Built at an estimated cost of $20 billion, the refinery commenced commercial operations in 2024 and attained full production capacity earlier this year. The Nigerian National Petroleum Company Limited (NNPCL) owns slightly more than 7% of the company.

Beyond Nigeria, the refinery is attracting significant interest from investors and stock exchanges across the continent. Sources said exchanges in South Africa, Kenya, Egypt, Ghana and Rwanda have held discussions with the company's advisers regarding the transaction.

Kenya refinery under consideration

In addition to expanding its Lagos operations, the company is reportedly exploring the construction of another refinery on the Kenyan coast in collaboration with governments in East Africa.

Earlier this year, President of the Dangote Group, Aliko Dangote, announced plans to increase the refinery's capacity to 1.4 million barrels per day, reinforcing its ambition to become one of the world's largest refining hubs.

Sources also revealed that investors participating in the IPO would have the flexibility to subscribe in either naira or US dollars, with returns payable in the selected currency.

This arrangement is expected to appeal to both domestic and international investors as the refinery seeks to broaden its shareholder base while financing its next phase of expansion.