Nigeria’s Ondo State Government said on Wednesday (November 5) it has signed a $50bn investment agreement with a consortium of international firms under the Sunshine Infrastructure Joint Venture to establish a 500,000 barrel-per-day (bpd) oil refinery and free trade zone, The Punch reports.

Earlier this week, Backbone Infrastructure Nigeria Limited said it has secured expressions of interest for up to NGN71.8 trillion ($50bn) in funding to develop a refinery and build out the 1,471-hectare Sunshine Free Trade Zone in Ilaje, Ondo State.

The initiative follows a memorandum of understanding (MoU) signed between the Nigerian company and the Ondo State Government in July. The State government said on Wednesday it signed an agreement with a consortium that includes Backbone Infrastructure, China Harbour Engineering Company (CHEC), and Honeywell OUP. 

CHEC, a subsidiary of China Communications Construction Company (HK:1800; SHA:601800), typically acts as an engineering, procurement, and construction (EPC) contractor rather than a primary project financier. Honeywell OUP is a private real estate and industrial development arm of Honeywell Group.

“The funding followed the successful execution of the Memorandum of Understanding between the Joint Venture and the state government through the Ondo State Investment Promotion Agency,” said Governor Lucky Aiyedatiwa’s press secretary, Ebenezer Adeniyan, in a statement. “This investment marks a new dawn for Ondo State. It will fast-track industrial development, attract more investors and create jobs for our people.”

Backbone earlier stated that the planned development would include storage, loading and transport infrastructure to position the zone as a refining and export hub. The private Nigerian infrastructure and project development firm said it was working with strategic partner NEFEX Holding Limited, a Canadian company that operates across key sectors of the global energy and logistics chain.

The investment scale represents a major increase from estimates publicised in mid-2025, when Backbone described the refinery concept as a 100,000-bpd project with an indicative cost of around $15bn. The larger figure reflects a fivefold expanded capacity and broader integrated zone development.

Sunshine Infrastructure JV managing director Henry Owonka is quoted by The Punch as saying that the Ondo refinery-free trade zone project’s initial valuation, which he put at $30bn, has been revised upwards to $50bn following an expansion to cover broader infrastructure and community-driven programmes. The refinery would supply petroleum products locally and internationally, he added.

The Nigerian government has prioritised domestic refining to reduce fuel imports and preserve foreign exchange. However, large-scale private refinery projects have frequently faced delays linked to financing conditions, FX volatility, and crude supply arrangements.

If realised, the proposed 500,000bpd refinery project in Ondo would significantly expand Nigeria’s private downstream refining capacity, alongside the 650,000bpd Dangote refinery, which was commissioned in 2024 and last month announced plans to double its capacity.

Dangote said on November 1 it is ramping up gasoline and diesel output to meet domestic demand, after the government last week approved a 15% import duty on refined petroleum products.

Meanwhile, as bne intelliNews reported, the Nigerian National Petroleum Company Limited (NNPCL) has begun a fresh review of the country’s three state-owned refineries, Port Harcourt, Warri and Kaduna, signalling yet another attempt to revive facilities that have remained largely idle despite repeated rehabilitation efforts.