Nigerian billionaire Aliko Dangote has revealed his involvement in financing a significant new project: a $660 million fuel pipeline connecting Ethiopia to Djibouti. This initiative aims to enhance the energy infrastructure in the region and is set to include a 120-kilometer (approximately 75 miles) pipeline that will link the Damerjog port in Djibouti to a distribution facility located in Dewele, Ethiopia.
The pipeline will also feature storage capabilities of around 400 million liters. The operational launch of this project is anticipated within the next 18 months. Ethiopian Prime Minister Abiy Ahmed has indicated that this new pipeline will drastically decrease the fuel transport time from Djibouti’s port to the capital city of Addis Ababa from five days to just one day, marking a significant improvement in logistics.
Impact on Energy Security and Economy
During the ground-breaking ceremony, Dangote emphasized that this development would bolster Ethiopia’s energy security and enhance the resilience of its fuel supply chain. Ethiopia, being a landlocked country, heavily depends on Djibouti’s port for its imports, particularly petroleum products. The establishment of this infrastructure is expected to alleviate the strain on current transportation systems that support vital sectors, including aviation, agriculture, construction, and general transport.
Moreover, Djibouti is poised to gain from increased port activity, leading to job creation and higher government revenues, which will contribute to the local economy. This project is part of a broader strategy by Dangote to expand his influence in infrastructure and manufacturing throughout Africa.
Dangote’s Broader Business Ventures
Aliko Dangote, recognized as Africa’s wealthiest individual, has extensive business interests beyond the pipeline project. His cement manufacturing operation boasts an impressive production capacity of approximately 55 million tonnes annually. Additionally, his oil refinery based in Nigeria has a current processing capacity of 700,000 barrels of crude oil each day, with plans to increase this to 1.4 million barrels per day.
Recently, the refinery took a significant step by listing 4.1 billion ordinary shares on the Nigerian stock exchange, with the goal of raising about $1.63 billion (£1.2 billion). Furthermore, in Kenya, Dangote’s company is set to commence construction next week on a new crude oil refinery in Lamu, which is projected to have a capacity of 700,000 barrels per day.
