Dangote Industries Limited (DIL) and China’s leading private energy conglomerate, the GCL Group, have signed a $4.2 billion deal to power Dangote Group’s major expansion projects in Ethiopia.

The 25-year natural gas supply agreement will see GCL Group supply stable natural gas to Dangote Group’s upcoming three-million-tonne-per-year urea fertiliser production complex in the East African country.

According to a statement released in Lagos, the plant, which is being developed under a 60:40 equity structure between Dangote Group and Ethiopian Investment Holdings (EIH) and valued at $2.5 billion, will commence operations in 2029.

“The natural gas supplied by GCL will be sourced from the Calub Gas Field in Ethiopia’s Ogaden Basin and delivered via a dedicated 108-kilometre pipeline directly to the Dangote fertiliser complex in Gode, Somali Region. The initiative aligns with Africa’s broader objective of establishing an integrated energy-to-food value chain, leveraging local resources to drive industrial autonomy,” the statement read.

The statement added that the plant will not only have an effect on East Africa’s fertiliser landscape but will also reduce reliance on imports and strengthen agricultural self-sufficiency.

Speaking on the partnership, the President/Chief Executive of Dangote Industries Limited, Aliko Dangote, was quoted as saying: “Africa’s energy industry cannot continue indefinitely exporting raw materials while importing finished products. We must pursue a new path of highly autonomous development.

“Through seamless integration and strategic cooperation with GCL, we will achieve an efficient closed-loop value chain from natural gas extraction to fertiliser production, taking a crucial step towards enabling Africa to secure greater autonomy over its food security.”

Chairman of GCL Group, Zhu Gongshan, while restating his company’s commitment to the partnership, said the agreement came into reality through the support of the Ethiopian government.

“This cooperation will enable both sides to expand new frontiers in Ethiopia’s energy, chemical and food security sectors while transitioning from a ‘business going global’ model towards a mutually beneficial ecosystem-based framework.

“Leveraging GCL’s integrated oil and gas operations in Ethiopia and Dangote Group’s extensive industrial footprint across Africa, the partnership will significantly enhance our service capabilities and market reach across the continent,” Gongshan said.

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