China’s GCL to Build Ethiopia’s First Oil Refinery in $2.5 Billion Deal

Ethiopia officially began construction on its first-ever oil refinery, a $2.5 billion project spearheaded by China’s Golden Concord Group (GCL). 

The facility, known as the “Gode Refinery,” is expected to have an annual production capacity of 3.5 million metric tons of fuel, marking a major milestone in the country’s industrial development.

According to the Ethiopian government, the refinery will be constructed in two phases, with the first phase to be completed within 24 months, as confirmed by Billene Seyoum, spokesperson for Prime Minister Abiy Ahmed.

The refinery will process crude oil and condensates sourced from the Hilala oil fields in Ethiopia’s eastern Somali region, which are part of the country's growing energy portfolio. The Hilala fields, along with the nearby Calub gas reserves, are expected to underpin a wider strategy for Ethiopia’s energy independence and export potential.

Ethiopian Prime Minister Abiy emphasized the broader significance of the project in a statement on social media platform X: “These projects represent more than industrial progress — they reflect our shared responsibility to seize opportunities, deepen cooperation, and promote peace.”

The Gode refinery is part of a broader $30 billion national investment plan unveiled in September during the inauguration of the $4.8 billion Grand Ethiopian Renaissance Dam (GERD). The plan includes: A new $10 billion international airport, a nuclear power plant to be developed in cooperation with Russia, a $2.5 billion fertilizer plant under construction by Ethiopian Investment Holdings in partnership with Nigeria’s Dangote Group, powered by natural gas from the Calub fields.

These investments are aimed at transforming Ethiopia into a regional industrial and energy hub, boosting self-sufficiency and reducing dependency on fuel imports, which currently strain the country's foreign reserves.

Ethiopia, a landlocked nation with Africa’s second-largest population, currently imports nearly all refined petroleum products, often through Djibouti. The refinery, and related infrastructure, could dramatically cut fuel import costs, ease forex pressures, and pave the way for fuel exports to neighboring countries.

Additionally, the collaboration with China’s GCL underscores Beijing’s continued commitment to long-term infrastructure partnership with Ethiopia.