•World’s fifth biggest urea production project for completion in 40 months

Emmanuel Addeh in Abuja

The Dangote Group and Ethiopia government yesterday signed an agreement to build a $2.5 billion fertiliser manufacturing plant in the North-eastern African country, part of Nigerian billionaire AlikoDangote’s  efforts to end the continent’s fertiliser imports.

To be located in Gode town in Ethiopia’s South-east, the plant will produce 3 million metric tons of fertiliser per year. The deal was signed by state-owned Ethiopian Investment Holdings (EIH) on behalf of the government.

With the agreement, Ethiopia will have a 40 per cent stake in the venture while the Dangote Group will own 60 per cent, EIH Chief Executive, Brook Taye, said at the signing ceremony in Addis Ababa.

EIH, the strategic investment arm of the Government of Ethiopia, in a statement seen by THISDAY, said the signing of the comprehensive shareholders’ agreement will involve the development, construction, and operation of the world-class urea fertiliser production complex.

“Under the partnership structure, EIH will hold a 40 per cent equity stake while Dangote Group will maintain 60 per cent ownership of the transformative project that represents one of the largest industrial investments in Ethiopian history,” the statement said.

According to the statement, the ambitious project will establish one of the world’s largest single-site urea fertiliser production complexes, with production facilities boasting a combined capacity of up to 3 million metric tons per annum. 

This capacity, it said, positions the Gode facility among the top five largest urea production complexes globally, while  the two entities will jointly finance, own, construct, and operate the state-of-the-art urea plants and associated infrastructure. 

The comprehensive development, EIH stressed, includes a pipeline to transport natural gas from a gas processing facility in Calub and Hilala gas fields and outlines potential expansions, upgrades, and new initiatives in the production of ammonia-based fertilisers, including ammonium nitrate, ammonium sulfate, and calcium ammonium nitrate, further strengthening Ethiopia’s position as a regional hub for fertiliser production.

“The Project Development Costs are estimated not to exceed $2.5 billion, with completion targeted within 40 months from commencement. This substantial investment underscores the commitment of both entities to transforming Ethiopia’s agricultural sector and enhancing food security across the region,” the statement added.

The project is expected to significantly reduce Ethiopia’s dependence on fertiliser imports while creating thousands of direct and indirect employment opportunities in the Somali Regional State and beyond.

Commenting on the deal, Chairman of Dangote Group, Aliko Dangote, described it as a pivotal moment, explaining that it is part of a shared vision to ensure food security across the African continent.

“This partnership with Ethiopian Investment Holdings represents a pivotal moment in our shared vision to industrialise Africa and achieve food security across the continent. The strategic location of Gode, combined with Ethiopia’s abundant natural gas resources from the Hilalaand Calub reserves, makes this an ideal location for what will become one of the world’s largest fertiliser 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,” he said.

In his remarks, Chief Executive Officer of Ethiopian Investment Holdings, Taye stated that the project aligns perfectly with the country’s national development priorities and will substantially enhance its agricultural productivity while positioning Ethiopia as a regional hub for fertiliser production.

“This landmark agreement with Dangote Group marks a significant milestone in Ethiopia’s journey toward industrial self-sufficiency and agricultural modernisation. As the strategic investment arm of the Government of Ethiopia, EIH is proud to secure a 40 per cent 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 fertiliser production. The utilisation of our domestic Hilala and Calub gas reserves through dedicated pipeline infrastructure ensures energy security and cost competitiveness for decades to come.

“We are confident that this partnership will deliver tremendous value to Ethiopian farmers, contribute to food security, and generate substantial economic benefits for our nation,” Taye added.

The Gode fertiliser complex is expected to play a crucial role in supporting Ethiopia’s agricultural sector, which employs over 70 per cent of the country’s population. 

By ensuring reliable access to high-quality fertilisers at competitive prices, the project is expected to boost crop yields, improve farmer incomes, and contribute to national food security objectives. 

The project positions Ethiopia as a major player in the global fertilisermarket and a key supplier for the African continent. The partnership leverages Dangote Industries’ proven track record in large-scale industrial projects across Africa and Ethiopian Investment Holdings’ role as the government’s strategic investment vehicle with deep understanding of the local market and regulatory environment. 

The project also supports broader regional integration objectives by creating a reliable supply of fertilizers for neighboring countries, potentially reducing import costs and improving agricultural productivity across East Africa and beyond, the statement emphasised.

Established in 2021 to manage and optimize state-owned commercial assets with a focus on long-term value creation, EIH owns and manages some 40 state-owned enterprises, including Ethiopian Airlines, Commercial Bank of Ethiopia, Ethio Telecom, and Ethiopian Shipping and Logistics. 

On the other hand, Dangote Group is Africa’s leading industrial conglomerate with operations spanning cement, fertiliser, petrochemicals, and other key sectors across the continent

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