Dangote, Ethiopia Partner on $2.5B Urea Fertilizer Plant in Gode

Ethiopian Investment Holdings (EIH) and Nigeria’s Dangote Group have signed a shareholders’ agreement to build and operate a urea fertilizer production complex in Gode, Somali Regional State.

The $2.5 billion project will be one of the largest industrial investments in Ethiopia’s history, with a planned annual capacity of three million metric tons. Upon commencing operations, it could place Ethiopia among the top five global producers of urea.

Under the agreement, Dangote Group will hold 60% of the venture, while EIH, the government’s strategic investment arm, will retain 40%. The project includes the construction of state-of-the-art fertilizer plants and a pipeline to transport natural gas from the Calub and Hilala fields to the Gode facility.

The project aims to cut Ethiopia’s reliance on imported fertilizers, a major cost driver in the country’s agriculture sector, which employs more than 70% of the population. Officials say the facility will not only supply the domestic market, which consumes over 20 million quintals annually, but could also position Ethiopia as a regional hub for fertilizer exports.

Over the past two years, Ethiopia has spent over a billion dollars to import fertilizer through a revised arrangement that grants flexibility with procurement procedures through a new board chaired by the agriculture minister.  The Board initially comprised senior federal officials such as Mamo Mihretu, governor of the central bank; Alemu Sime (PhD), minister of Transport & Logistics; Alemtsehay Pawlos, chief of Cabinet; Semereta Sewasew, state minister for Finance; and Abie Sano, president of the Commercial Bank of Ethiopia (CBE).

Beyond urea, the new partnership plans potential expansions into other ammonia-based fertilizers, such as ammonium nitrate and ammonium sulfate.

Construction costs are capped at $2.5 billion, with completion targeted within 40 months. The venture will be financed jointly by the partners, leveraging Dangote’s experience in large-scale industrial projects and EIH’s role as the government’s investment vehicle. EIH a holding company with 40 state-owned enterprises (SOE) under its portfolio, helmed by Brook Taye (PhD), has increasingly sought out lucrative private partnerships over the past year. SOE reform is also part of the macroeconomic overhaul initiated last year under an IMF backed economic program.