Nigerian industrialist Aliko Dangote has secured a $4.2 billion long-term gas supply agreement with GCL Group to power a major fertiliser production facility in Ethiopia, marking one of the largest industrial energy deals in East Africa.
The agreement, structured over 25 years, will ensure a steady supply of natural gas for a planned large-scale fertiliser complex expected to produce up to three million tonnes of urea annually. The project forms part of Ethiopia’s broader push to strengthen domestic manufacturing and reduce reliance on fertiliser imports.
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The fertiliser plant, estimated at $2.5 billion, is being developed through a joint venture between Dangote Group and Ethiopian Investment Holdings, with completion targeted for 2029.
Once operational, the facility is expected to play a critical role in transforming Ethiopia’s agricultural value chain by improving access to fertiliser and stabilising prices for farmers.
Gas for the project will be sourced from the Ogaden Basin, particularly the Calub fields, and transported through dedicated infrastructure to the plant. The move reflects a broader shift toward integrating domestic energy resources into industrial production.
The partnership also underscores deepening economic ties between China and Africa, as companies like GCL increasingly link energy supply, financing, and technology to large-scale industrial investments across the continent.
For Ethiopia, the project comes at a critical time. Fertiliser imports have long strained foreign exchange reserves, and local production is expected to ease that pressure while boosting agricultural productivity.
Beyond Ethiopia, increased fertiliser output could help stabilise supply and prices across East Africa, introducing new competitive dynamics for regional importers while supporting food security efforts.
If successfully implemented, the project is set to position Ethiopia as a key fertiliser production hub in Africa and reinforce its ambitions to expand industrial capacity through resource-based development.
