Dangote Group, Ethiopia sign agreement to jointly build $2.5bn fertiliser plant

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

The ambitious project will establish one of the world’s largest single-site urea fertilizer production complexes, with production facilities boasting a combined capacity of up to three million metric tons per annum. The facility will rank among the top five largest urea production complexes globally.

Under the agreement, the two companies will jointly develop, own, construct, operate, maintain, insure, and finance the state-of-the-art urea fertilizer plants and associated infrastructure. The comprehensive development includes advanced gas transport pipelines to evacuate natural gas from Ethiopia’s Hilal and Calub reserves, storage facilities, logistics infrastructure, and export capabilities designed to serve both domestic and regional markets.

The agreement also provides for potential expansions, upgrades, and similar fertilizer production initiatives in ammonia-based fertilizers, including ammonium nitrate, ammonium sulfate, and calcium ammonium nitrate, further cementing Ethiopia’s position as a regional fertilizer production hub.

The Project Development Costs are estimated not to exceed $2.5 billion USD, with completion targeted within 40 months from commencement. A significant component of this investment includes the construction of a dedicated pipeline infrastructure to transport natural gas from Ethiopia’s proven Hilal and Calub gas reserves to the Gode production facility, ensuring a reliable and cost-effective feedstock supply for the fertilizer complex.

This substantial investment underscores both companies’ commitment to transforming Ethiopia’s agricultural sector and enhancing food security across the region. The project is expected to significantly reduce Ethiopia’s dependence on fertilizer imports while creating thousands of direct and indirect employment opportunities in the Somali Regional State and beyond.

Aliko Dangote, President/Chief Executive of Dangote Group, commented: “This partnership with Ethiopian Investment Holdings represents a pivotal moment in our shared vision to industrialize Africa and achieve food security across the continent. The strategic location of Gode, combined with Ethiopia’s abundant natural gas resources from the Hilal and Calub reserves, makes this an ideal location for what will become one of the world’s largest fertilizer 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.”

Dr. Brook Taye, Chief Executive Officer of Ethiopian Investment Holdings, stated: “This landmark agreement with Dangote Group marks a significant milestone in Ethiopia’s journey toward industrial self-sufficiency and agricultural modernization. As the strategic investment arm of the Government of Ethiopia, EIH is proud to secure a 40% 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 fertilizer production.

The utilization of our domestic Hilal 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.”

Strategic Impact

The Gode fertilizer complex will play a crucial role in supporting Ethiopia’s agricultural sector, which employs over 70% of the country’s population. By ensuring reliable access to high-quality fertilizers at competitive prices, the project is expected to boost crop yields, improve farmer incomes, and contribute to national food security objectives. With its 3 million metric ton annual capacity, the facility will rank among the world’s top fertilizer production complexes, while significantly exceeding the capacity of most existing facilities worldwide.

This scale positions Ethiopia as a major player in the global fertilizer market and a key supplier for the African continent. The partnership leverages Dangote Group’s 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 pipeline connection to the Hilal and Calub gas reserves ensures long-term feedstock security and cost competitiveness in global markets. 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.