Femi Otedola announces $100 million Dangote Refinery investment

Femi Otedola, billionaire chairman of First HoldCo and one of Nigeria’s richest men, said Wednesday he would invest $100 million in the Dangote Oil Refinery.

Otedola made the announcement after a tour of the massive facility in Lagos’ Lekki Free Zone. He brought a delegation of senior executives from First HoldCo to the site to complete the pledge to back the continent’s biggest industrial project.

The $100 million investment comes at a critical time for the 650,000 barrel-per-day refinery. The facility, built by Africa’s richest man, Aliko Dangote, at an estimated cost of $23 billion, is now moving from a privately held mega-project to a publicly traded asset.

Financial analysts across West Africa see Otedola’s sudden financial backing as a massive vote of confidence from Nigeria’s elite corporate circle. The refinery is in the process of preparing for an initial public offering on the Nigerian Exchange, which could take place as early as mid-2026. The listing is expected to value the company at $40 billion to $50 billion, raising up to $5 billion by selling a 10 percent stake in the company. Market analysts said it is expected to be the largest public offering in the history of African capital markets.

Otedola has been a vocal proponent of the refinery, praising it publicly for its promise to end Nigeria’s decades-long reliance on imported petroleum products. Despite being one of Africa’s largest crude oil producers, the country has historically suffered from acute fuel shortages and massive fiscal strain due to a broken downstream infrastructure and abandoned state-owned refineries.

Those dynamics have been altered since the Dangote plant began supplying petroleum products on the domestic market. The plant now processes more than 500,000 barrels of crude oil a day, and expects to reach its full capacity of 650,000 by the end of the year. The rise in output has slashed Europe’s gasoline imports into West Africa and turned Nigeria into a net exporter of jet fuel and naphtha.

The First HoldCo incoming investment sees Otedola as a key private anchor investor ahead of the public share subscription. The soon-to-be-listed company has already attracted a lot of attention from institutional asset managers, home retail investors and regional pension funds. Discussions are also going on at high levels about possible dual listings on the Johannesburg Stock Exchange and the London Stock Exchange to tap into wider global capital.

One of the most competitive features of the upcoming public offering is the unique dividend architecture. The Dangote Group has proposed a scheme that would allow local investors to purchase shares in naira but get dividends in US dollars. The mechanism relies on the refinery’s projected $6.4 billion in annual petrochemical export revenues and gives local investors a rare institutional hedge against domestic currency fluctuations.

The operational scaling of the Lekki complex has not been without its friction. The refinery has been embroiled in public spats with local fuel marketers over import licenses and ongoing court battles over the regulation of domestic fuel supplies. Regulatory friction on the minimum volume of public shares required for secondary international listings has also led advisers to think about alternative trading structures such as depository receipts.

Otedola’s cash injection means local private capital remains at the heart of the refinery’s ownership structure until the international funds bid for shares. Executives from both conglomerates did not immediately reveal the specific timing for the transfer of the $100 million or the precise equity percentage the investment represents.

Additional information on the allocation of the proceeds and the formal filing of the prospectus by the Securities and Exchange Commission is expected to be announced during the upcoming national investor roadshow.