Huge Nigerian oil refinery wins backing Africa's richest man will sign a $3.3bn financing deal in Nigeria on Wednesday to build the continent's biggest oil refinery, as well as large fertiliser and petrochemical plants. IN Oil & Gas Aliko Dangote, whose Dangote Industries agreed the loan deal with 12 local and foreign banks, said the refinery would have a capacity of 400,000 barrels a day, and would halve Nigeria's fuel imports. Despite being Africa's largest oil producer, with output of nearly 2m b/d, the country buys most of its petrol and diesel abroad and spends billions of dollars in subsidies to keep pump prices low. It also imports vast quantities of fertiliser. The refinery, and the fertiliser and petrochemical plants, are to be built in southwest Nigeria and will cost $9bn, with $6bn to be raised in loan capital and $3bn in equity from Dangote Industries. The initial loan facility was co-ordinated globally by Standard Chartered, and in Nigeria by Guaranty Trust Bank. Mr Dangote, whose Dangote Group accounts for more than 30 per cent of the total market capitalisation on the Nigerian Stock Exchange, made his estimated $20bn fortune in food and cement importation and, more recently, production. Dangote Cement is the largest producer of the building material in sub-Saharan Africa and plans to list on the London Stock Exchange in 2014 or 2015. Announcements in Nigeria of grand projects that never materialise - including a $23bn agreement with China in 2010 to build new refineries - are frequent. But Mr Dangote's business record and political influence means there is a genuine expectation that the refinery will be built. "Dangote will have ensured co-operation from government and he will do this project," said Bismarck Rewane, chief executive of Financial Derivatives, a Lagos-based consultancy. It will give him a dominant position in the market for some time. Nigeria's current oil refining capacity at its four state-owned plants is 445,000 b/d, but ageing infrastructure and poor maintenance means that output is often less than half that. Shortages of petrol are frequent, and the opaque subsidy system has allowed fuel importers and corrupt government officials to siphon off billions of dollars in recent years. "This plant will further entrench Africa's role on the global map as not only a valued contributor for natural resources, but also a competent manufacturer of refined products and fertiliser," Mr Dangote said in a statement. As a result, several African nations will be less reliant on importing fuel and fertiliser from foreign markets, reducing the negative impact of negotiating terms within increasingly turbulent international markets. The refinery is expected to be completed by 2016, and will be built by UOP, a subsidiary of Honeywell in the US, according to Mr Dangote. He has said the refinery can make a profit even if the subsidy on petrol is maintained. The fertiliser plant will produce 2.8m tonnes of urea for the domestic and regional market. Nigeria, which is one of the world's largest importers of rice, is trying to boost its crop output to feed a fast-growing population of 160m people. Polypropylene will be produced at the petrochemical plant.