PenCom Grants PFAs Approval To Invest In Dangote Refinery’s IPO

The National Pension Commission has granted Pension Fund Administrators a one-off regulatory forbearance to invest pension assets in the Initial Public Offering of Dangote Petroleum Refinery & Petrochemicals FZE.

The Commission stated this in a Circular signed by the director of the Surveillance Department, A.M. Saleem.

The Circular said, the Commission has carefully evaluated the strategic investment opportunity and economic impact of the proposed Initial Public Offering (IPO) of Dangote Petroleum Refinery & Petrochemicals FZE (DPRP) on the pension industry and the wider economy.

“In light of these considerations, the Commission has reviewed the request for special dispensation permitting Pension Fund Administrators (PFAs) to invest pension fund assets in the IPO.

“In reaching its decision, the Commission considered DPRP’s strategic importance, strong fundamentals, extensive economic benefits, and growth potential. The record of Dangote Industries Limited, the majority shareholder of DPRP, was also taken into account,” the memo said.

“Accordingly, the Commission hereby grants a special dispensation from Section 6.2.7.1 (1) of the Revised Regulation on Investment of Pension Fund Assets. This dispensation waives the applicable existence, profitability, and dividend requirements, without prejudice to other existing regulatory safeguards.

“PFAs are required to ensure that all investments made under this dispensation are in compliance with their internal investment policies, risk management frameworks, and fiduciary duties to contributors and retirees,” it noted.

According to the circular, the regulatory forbearance granted under this Circular is exceptional, one-time, and specifically limited to the Initial Public Offering of Dangote Petroleum Refinery & Petrochemicals FZE. It shall not serve as an automatic precedent for future Initial Public Offerings or other investment transactions.

Dangote Petroleum Refinery is planning a landmark IPO to list a 10 per cent stake on the Nigerian Exchange (NGX), aiming for a valuation of up to $50 billion. The 650,000 bpd refinery, which began production in 2024, seeks to raise approximately $5 billion to expand capacity, with shares available to both local and international investors.

The IPO is expected to be one of the largest in Nigerian history, intended to democratize ownership of the refinery and enhance market liquidity.