Dangote Industries Limited and China’s GCL Group have formalized a landmark agreement valued at $4.2 billion to supply natural gas for a massive new fertilizer project in Ethiopia.
The contract, signed in Lagos on March 16, 2026, secures a stable energy supply for a period of 25 years. This agreement serves as the primary energy foundation for the Dangote Ethiopia Fertilizer Plant, a facility currently under development in Gode within the Somali Region of Ethiopia.
The fertilizer complex itself represents a $2.5 billion investment and is structured as a joint venture between the Dangote Group, which holds a 60% equity stake, and Ethiopian Investment Holdings, which retains the remaining 40%.
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Once completed in 2029, the plant will have a production capacity of 3 million metric tonnes of urea per year, positioning it as one of the top five largest urea production facilities globally and the largest in East Africa.
Energy for the facility will be sourced from the Calub and Hilala gas fields located in the Ogaden Basin. Under the terms of the deal, GCL Group will oversee the transportation of the gas through a newly constructed 108-kilometer pipeline connecting the gas fields directly to the Gode production hub.
The Chinese firm expects to deliver approximately 1.33 billion liters of energy equivalent annually by the time operations reach full scale.This project is intended to eliminate Ethiopia’s dependence on imported urea, which currently puts a significant strain on the country’s foreign currency reserves.
Beyond domestic self-sufficiency, the plant is designed to serve as a regional export hub for neighboring East African markets.
Aliko Dangote has stated that the partnership is a critical move toward African industrial autonomy, transforming the continent from an exporter of raw materials into a manufacturer of high-value finished products.
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The expansion also aligns with the broader Dangote Group strategy to increase total urea production capacity across the continent. In addition to the Ethiopian project, the group is expanding its Nigerian operations to reach a combined output of 9 million metric tonnes annually.
Technical partners for the Ethiopian site include Saipem and Topsoe, who are providing the ammonia and urea melt technology required for the facility’s two main production trains.
Source : Nairametrics
