Kenya, Ethiopia and Rwanda have expressed interest in taking equity positions in Dangote Industries’ proposed refinery project in Kenya, with the Nigerian industrialist offering East African countries a combined 30% stake in the planned $17 billion facility.
Kenya is considering a 10% interest valued at approximately $500 million, while Ethiopia and Rwanda have also indicated interest in participating, according to David Ndii, an economic adviser to Kenyan President William Ruto.
Ndii disclosed the proposed regional participation on Thursday at a capital markets forum in Nairobi, saying the combined investment from East African countries could reach approximately $1.5 billion.
“The total for the region is about $1.5 billion. I don’t actually see a challenge in doing that, and if some of them are not off-taking we will backstop,” he said.
Under the proposed arrangement, participating countries would hold direct interests in the refinery while potentially securing access to refined petroleum products for their domestic markets. Dangote is also prepared to support the investment structure where participating countries are unable to commit as crude oil off-takers.
The refinery is planned for Lamu, a coastal town in southeastern Kenya. The project was initially conceived for Tanga, Tanzania, but Dangote subsequently moved the proposed location to Kenya, citing commercial and technical considerations.
The planned facility is expected to cost approximately $17 billion and take about five years to complete, according to a spokesperson for Dangote Industries Limited who disclosed the estimated cost and timeline in July.
The project would replicate the scale of Dangote’s refining operations in Nigeria, where the Dangote Petroleum Refinery currently has a capacity of 700,000 barrels per day.
Dangote had initially announced plans for a refinery in Tanzania during a panel session at an Africa Finance Corporation summit in Nairobi, where he appeared alongside Kenyan President William Ruto and Ugandan President Yoweri Museveni.
The proposed shift to Kenya has since positioned Lamu as the planned location for the refinery and associated infrastructure.
Interest in the project has also extended beyond governments. Tanzanian billionaire Mohammed Dewji expressed interest in investing $100 million in the proposed Kenyan refinery in July, as Dangote seeks to expand his energy business across East Africa.
The proposed regional equity participation comes as Dangote pursues expansion of his refining operations beyond Nigeria. The group has been considering plans to increase the Nigerian refinery’s capacity from 700,000 bpd to 1.4 million bpd.
Dangote is also turning to the capital market to finance expansion of its Nigerian refining business. The Dangote Petroleum Refinery & Petrochemicals FZE has secured a $1 billion underwriting programme ahead of its proposed initial public offering.
The programme consists of a funded $600 million private placement and an additional $400 million underwriting commitment, subject to regulatory and market conditions.
The proposed Kenyan refinery, meanwhile, would broaden Dangote’s refining footprint into East Africa and potentially create a new regional source of refined petroleum products. The proposed 30% allocation could also provide a framework for participation by other investors within the wider East African market beyond Kenya, Ethiopia and Rwanda.