In a strategic move to expand its footprint in Africa, the Dangote Group has signed an agreement with the Ethiopian Investment Holdings (EIH), the investment arm of the Government of Ethiopia, to develop,construct, and operate a world-class urea fertilizer production complex in Gode, Ethiopia.
Dangote group, in a statement on Thursday, disclosed that 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 group said the ambitious project would establish one of the world’s largest single-site urea fertilizer production complexes, with production facilities boasting a combined capacity of up tothree million metric tons per annum, and would rank among the top five largesturea production complexes globally.
It said inder the agreement, 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 evacuatenatural 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, according to Dangote group, also provides for potential expansions, upgrades, and similar fertilizer production initiatives in ammonia-based fertilizers, including ammonium nitrate, ammoniumsulfate, and calcium ammonium nitrate, further cementing Ethiopia’s position asa regional fertilizer production hub.
It said the Project Development Costs are estimated not to exceed $2.5 billion USD, with completion targeted within 40months from commencement.
“A significant component of this investmentincludes the construction of a dedicated pipeline infrastructure to transportnatural gas from Ethiopia’s proven Hilal and Calub gas reserves to the Godeproduction facility, ensuring a reliable and cost-effective feedstock supply forthe fertilizer complex,” the group said.
“This substantial investment underscores bothcompanies’ commitment to transforming Ethiopia’s agricultural sector andenhancing food security across the region. The project is expected tosignificantly reduce Ethiopia’s dependence on fertilizer imports while creatingthousands of direct and indirect employment opportunities in the SomaliRegional State and beyond,” it added.
The statement said while commenting on the agreement, the President/Chief Executive Officer of Dangote Group, Aliko Dangote said: “This partnership with Ethiopian Investment Holdings represents a pivotal moment in our shared vision to industrialize Africa and achieve food security across the continent. The strategic location of Gode, combined with Ethiopia’sabundant natural gas resources from the Hilal and Calub reserves, makes this an ideal location for what will become one of the world’s largest fertilizer 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.”
Also speaking, Chief Executive Officer of Ethiopian Investment Holdings, Dr. Brook Taye, stated: “This landmark agreement with Dangote Group marks a significant milestone in Ethiopia’sjourney toward industrial self-sufficiency and agricultural modernization. As the strategic investment arm of the Government of Ethiopia, EIH is proud tosecure 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.
“The utilization of our domestic Hilal and Calub gas reserves through dedicated pipeline infrastructure ensures energy security and cost competitiveness for decades to come. We are confident thatthis partnership will deliver tremendous value to Ethiopian farmers, contributeto food security, and generate substantial economic benefits for our nation,” Dr. Taye said.
“The Gode fertilizer complex will play acrucial role in supporting Ethiopia’s agricultural sector, which employs over 70% of the country’s population. By ensuring reliable access to high-qualityfertilizers at competitive prices, the project is expected to boost cropyields, improve farmer incomes, and contribute to national food securityobjectives. With its 3 million metric ton annual capacity, the facility willrank among the world’s top fertilizer production complexes, while significantlyexceeding the capacity of most existing facilities worldwide.
“This scale positions Ethiopia as a majorplayer in the global fertilizer market and a key supplier for the Africancontinent. The partnership leverages Dangote Group’s proven track record inlarge-scale industrial projects across Africa and Ethiopian InvestmentHoldings’ role as the government’s strategic investment vehicle with deepunderstanding of the local market and regulatory environment.
“The pipeline connection to the Hilal and Calub gas reserves ensures long-term feedstock security and cost competitivenessin global markets. The project also supports broader regional integrationobjectives by creating a reliable supply of fertilizers for neighboringcountries, potentially reducing import costs and improving agriculturalproductivity across East Africa and beyond,” the statement concluded.
