Dangote Seals $4.2 Billion Gas Deal With Chinese Firm For Ethiopia’s Biggest Fertiliser Project
- Dangote Industries has secured $4.2 billion gas supply deal with GCL Group for Ethiopian fertiliser plant
- The $2.5 billion plant aims to reduce Ethiopia's fertiliser imports and boost agricultural productivity
- Project expected to create thousands of jobs and enhance economic growth in East Africa
Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.
Dangote Industries Limited (DIL) has sealed a landmark $4.2 billion natural gas supply agreement with China’s GCL Group to power a massive fertiliser expansion project in Ethiopia, marking one of the most ambitious industrial partnerships between Africa and China in recent years.
The 25-year agreement will provide a stable natural gas supply for Dangote Group’s upcoming fertiliser complex in Gode, located in Ethiopia’s Somali Region.
Source: Getty Images
When completed, the facility is expected to become East Africa’s largest fertiliser production hub, with an annual capacity of three million tonnes of urea.
The project represents another major step in Dangote Group’s expansion across Africa’s industrial and energy sectors.
$2.5bn fertiliser plant to transform East Africa’s agriculture
The fertiliser plant itself is estimated to cost $2.5 billion and will be developed under a 60:40 equity structure between Dangote Industries and Ethiopian Investment Holdings (EIH), Ethiopia’s sovereign investment arm.
Construction of the complex is already in planning stages, with commercial operations scheduled to begin in 2029.
Once operational, the plant is expected to significantly reduce Ethiopia’s reliance on fertiliser imports while supporting agricultural productivity across East Africa.
The facility will meet Ethiopia’s current demand for urea fertiliser and supply neighbouring countries across the region, strengthening food production and agricultural resilience.
Experts say the project could reshape the fertiliser supply chain in East Africa by creating a reliable local production base.
Gas from the Ogaden Basin to power the facility
The natural gas required for the fertiliser complex will be sourced from the Calub Gas Field in Ethiopia’s Ogaden Basin.
A dedicated 108-kilometre pipeline will transport the gas directly to the plant, ensuring a steady and efficient supply for fertiliser production.
This integrated model links upstream gas extraction, midstream transportation, and downstream fertiliser manufacturing into a single industrial chain.
The initiative aligns with Africa’s broader push to transform its natural resources into finished products rather than exporting raw materials.
Dangote pushes for Africa’s industrial self-sufficiency
Speaking on the partnership, President and Chief Executive Officer of Dangote Industries Limited, Aliko Dangote, stressed the importance of industrial transformation across the continent.
He noted that Africa must stop exporting raw resources while importing finished goods and instead develop integrated industrial systems that add value locally.
Dangote explained that the partnership with GCL would help create a seamless “gas-to-fertiliser” value chain, allowing Africa to utilise its natural gas resources to boost food production and economic independence.
China–Africa industrial partnership deepens
GCL Group Chairman Zhu Gongshan described the agreement as a major step in strengthening industrial collaboration between China and Africa.
According to him, the project will combine GCL’s experience in energy and chemical industries with Dangote Group’s extensive manufacturing presence across Africa.
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Gongshan added that the collaboration will expand Ethiopia’s energy, chemical and agricultural sectors while creating a new ecosystem of industrial development across the region.
Both companies also credited the Ethiopian government for providing strong support and leadership in facilitating the project.
Source: Getty Images
Jobs, infrastructure and regional growth
Industry analysts say the project carries significant economic benefits beyond fertiliser production.
The development is expected to create thousands of direct and indirect jobs, stimulate infrastructure development in Ethiopia’s Somali Region, and accelerate industrialisation in East Africa.
By using natural gas as the primary feedstock, the fertiliser plant also aligns with global trends toward lower-carbon industrial production.
The project is widely seen as a flagship initiative linking energy development to food security across the continent.
Once completed, the facility could position Ethiopia as a major fertiliser export hub in Africa while strengthening regional agricultural productivity and economic growth.
Dangote partners with German firm to build new fertiliser plants
Legit.ng earlier reported that the Dangote Fertiliser Limited (DFL) has signed a technology licensing deal with German company thyssenkrupp Uhde Fertiliser Technology (UFT) to build four new urea granulation plants in Lagos, Nigeria.
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The deal, as reported by The Nation newspaper, includes the provision of proprietary licensing of granulation technology and process design packages by UFT to Dangote’s new fertiliser plants.
The German firm would also reportedly provide specialised equipment to the new plants, which will be located in Lekki, alongside Dangote’s existing fertiliser complex.
Source: Legit.ng
