Dangote is set to break ground on its $20 billion refinery project in Kenya on September 30, with the facility planned to process up to 700,000 barrels of crude oil per day when completed.
The refinery will be located at Lamu’s deep-water port and is planned as a major regional refining hub, with its output expected to serve Kenya, Uganda, South Sudan, Rwanda, Burundi and the Democratic Republic of Congo.
Kenyan officials have estimated the project cost at $17 billion, while Aliko Dangote has put the value at about $20 billion. At 700,000 barrels per day, the proposed facility would rank among the largest refining projects in Africa once completed.
The project is expected to strengthen Kenya’s position in the regional petroleum products market by providing domestic refining capacity and creating a potential supply base for neighbouring landlocked countries.
However, financing remains a key issue for the development. Disclosed funding currently stands at about $1.6 billion against the estimated $17 billion-$20 billion project cost.
Dangote Group offered East African countries a combined 30 per cent equity stake valued at $1.5 billion in August. Kenya’s proposed 10 per cent stake has been valued at about $500 million by the country’s economic adviser, David Ndii. Tanzanian billionaire Mohammed Dewji has also committed $100 million to the project.
Crude supply infrastructure is also being considered alongside the refinery. Kenyan President William Ruto has said discussions are ongoing on a pipeline linking Turkana’s oil fields to Lamu, with the objective of moving the country’s crude resources to the coastal refinery.
Dangote expects construction of the refinery to run for about three years after the September groundbreaking, putting completion around 2029-2030.
The Lamu project will add another major refining development to East Africa’s emerging energy infrastructure, where Tanzania is also pursuing a $20 billion energy hub in Tanga, while Uganda is developing a separate 60,000-barrel-per-day refinery in Hoima.