Standard Chartered and Nigeria's Guaranty Trust Bank led the loan deal, which also involved two South African and eight Nigerian banks.
Dangote Group, the umbrella company of Africa's richest man Aliko Dangote, has said it is seeking a further $2.25 billion from development funds for the $9 billion project, into which it would put $3.5 billion of its own equity, and which will also produce fertilisers.
"As a result, several African nations will be less reliant on importing fuel and fertiliser from foreign markets, reducing the negative impact of negotiating terms within increasingly turbulent international markets," Aliko Dangote said at the signing ceremony in Nigeria's capital Abuja.
Nigeria imports 80 percent of fuel needs and the lack of refining capacity is a major brake on Africa's second biggest economy.
The company expects the refinery to be completed around 2016.
A statement issued at the event said the plant will produce 2.8 million tonnes of urea for fertilising crops and polypropylene, used to make plastics and synthetic fabrics.
The Dangote Group has interests ranging from cement to basic food processing to oil and gas.
The statement said stronger profit margins at Dangote Cement , which makes up nearly a third of the stock exchange, meant it could afford to foray into such projects.
"The project will significantly boost Nigeria's economic productivity and create valuable jobs," the head of Standard Chartered's Nigeria branch Bola Adesola said.
Nigeria now has the capacity to produce some 445,000 barrels per day among four refineries, but they operate well below that level owing to decades of mismanagement and corruption.
A boost to its refining capacity would be a blow to European refiners and oil traders, which make huge profits bringing gasoline into the country.
Other banks involved in the loan were South Africa's Standard Bank and FirstRand, and Nigerian lenders Access Bank, Zenith Bank, Ecobank Nigeria Limited, Fidelity Bank, First Bank, Diamond Bank, UBA and First City Monument Bank.
"I expect over the next year or two we will see other investors coming into the private refining sector," Oil Minister Diezani Alison-Madueke said at an economic summit in Abuja, where the signing took place.
| Posted: at | |
TRENDING GISTS 
EFCC Boss, Olukoyede Faces Visa Ban Threat Over Yahaya Bello's Case
Moses Bliss Reacts After A Troll Bashes Him For Allowing His Wife Preach Whenever They Go For Events
Manchester United v Arsenal: English Premier League Match,Team News,Goal Scorers and Stats
Your First Salary Belong To Your Father For His Blessings Not to Your Pastor - Kanayo O. Kanayo
JUST IN! Gov. Fubara Relocates Rivers Assembly Sitting To Government House
9yr Old Boy Stabs His 10yr Old Classmate to Death on Their Home From School