Page 16 - DMEA Week 19 2022

DMEA NEWS IN BRIEF DMEA

REFINING include standard covenant package for local almost all its aviation fuel is imported because
bond issuance. The documentation includes it lacks refining capacity.
Fitch provides rating for negative pledge and cross-default provisions. BG
Fitch’s expectations of recovery should result
Dangote in a Recovery Rating of ‘RR4’, with bond PIPELINES
rating at the same level as DIL’s National long-
Fitch Ratings has assigned Dangote Industries term rating.
Limited (DIL) a Nigerian National Long-Term DIL’s refinery project is still on track to be Bollore awarded logistics
Rating of ‘AA(nga)’ with a Stable Outlook. completed by 2023, and requires additional
Fitch has also assigned an expected National USD1.1 billion capex in 2022 to be partly contract for EACOP
rating of ‘AA(EXP)(nga)’ to the senior funded by the new bond. Considering
unsecured notes to be issued by DIL’s SPV, the importance of the refinery’s cash flow Bollore, an international transport and
Dangote Industries Funding Plc. The final contribution to the company’s deleveraging logistics company, has been awarded a
instrument rating is contingent on the receipt capacity, the timely completion of the project contract for logistics services related to the
of final documentation conforming with is a key driver of our rating, and only limited construction of the East African Crude Oil
information already reviewed. delays or cost overruns may be tolerated in the Pipeline (EACOP), which will be the world’s
DIL is planning to establish a local bond current rating. longest electrically heated crude oil pipeline,
programme amounting to USD750 million FITCH the company said in a statement.
to partially finance the completion of its Under the contract, which will be
refinery and petrochemical plant. Dangote implemented by Bollore Logistics subsidiaries
Oil Refining Company Limited (DORC) FUELS in Europe, Uganda and Tanzania, the
and Dangote Fertiliser Limited (DFL), DIL’s company will be responsible for the end-
subsidiaries, will be co-obligors under the Nigeria strikes three-month to-end receiving, storage, handling and
proposed programme. transportation of hundreds of thousands of
DIL is a diversified conglomerate in deal for cheaper jet fuel cubic metres of cargo, including over 80,000
Nigeria with a leading share in the cement units of 18-metre line-pipe, as well as multiple
business and a future key operator in the Nigeria’s state oil company has agreed to help heavy-lift operations and other tasks.
petrochemical industry through its fertiliser the country’s airlines source aviation fuel at a “The expertise of Bollore Logistics
and oil refinery business. Its strategy is to reduced price after they had threatened to halt worldwide will ensure efficient logistics
gradually establish a downstream industry all domestic flights. operations from global origin locations to the
in Nigeria and be the largest urea producer The airlines said the price of fuel had main project discharge port in Dar es Salaam,
in Nigeria. It also aims to make Nigeria a net tripled in just four months - partly because of Tanzania,” the statement said.
exporter of refined petroleum products and the impact that Russia’s invasion of Ukraine The contract will provide crucial support
petrochemicals by 2026. has had on the global energy market. for the construction of EACOP, a 1,443-km
DIL is rated on Fitch’s Nigerian National The agreement followed a meeting between buried pipeline that will transport about
Scale Rating. Its business model, profitability the Nigerian National Petroleum Corporation 216,000 barrels per day (bpd) of crude oil
and leverage metrics are commensurate with (NNPC), the central bank and airline from Uganda’s western Kabaale district to
an ‘AA(nga)’ rating category. DIL generates representatives. Tanzania’s Indian Ocean coast.
majority of its revenue from the domestic However, the deal is just for three months The project’s shareholders include
market and borrows in both Nigerian naira and the airline industry still faces potential TotalEnergies (France), China National
from local banks and in US dollars from disruption and fuel price hikes. Offshore Oil Corp. (CNOOC), Uganda
international markets. The average cost of a one-hour domestic National Oil Co. (UNOC) and Tanzania
DIL has significant secured debt viewed flight jumped from about $60 to $130 between Petroleum Development Corp. (TPDC).
as prior-ranking debt to its prospective February and May this year. Bollore is one of the largest transport
new unsecured bond. The future bond will Nigeria is Africa’s top oil producer, but and logistics firms on the African continent,

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